US stocks extend sell-off as investors fretted over Trump's policies

Major US equity indices opened lower on Tuesday and built on to Monday's sharp sell-off amid continued political uncertainty stemming from the US President Donald Trump's protectionist policies.

Monday’s selloff came in reaction to Trump’s executive order on Friday, calling for a travel ban from seven predominantly Muslim countries. The controversy deepened on Monday after Trump fired acting Attorney General Sally Yates, who declined to defend the order in court. 

Moreover, disappointing quarterly results from Pfizer, Xerox Corp., Exxon Mobil and Mastercard added to the sour market sentiment and collaborated to the downslide on Tuesday. Later during the day, tech giant Apple Inc. is also scheduled to report its earnings.

At the time of reporting, the Dow Jones Industrial Average fell over 100-points to 19,870, while the broader S&P 500 Index was down nearly 9-points to 2,272. Meanwhile, tech-heavy Nasdaq Composite Index dropped over 25-points to 5,586.

Meanwhile, cautiousness ahead of a busy week of important economic indicators (NFP) and central bank meetings (Fed) coupled with political uncertainty might have also led to the ongoing slump, especially after the recent rally to record high levels.

Technical outlook

Carol Harmer, Founder at charmertradingacademy.com notes "yesterdays action eased the short term overbought scenario and took us into oversold territory but still not enough to give us a move beyond 2282...We have a gap on the charts to 2291 - 2294....and this does need to be filled if we are to continue higher...Failure to break 2282 puts a lid on the market and sees us retreat back towards the 2268/66 support....If we take out 2266 we look for the med term 38,2 fib which is located at 2257...Now to maintain the uptrend this support needs to hold...It really does...and therefore below 2255 the market is going to come under increasing pressure and we would be looking at 2243 to 2230 as a viable targeted area...."