SP500 Rebounds, NASDAQ Gains Momentum, Dow Jones Under Pressure

The SP500 index is experiencing a rebound from recent lows, with traders focusing on the increasing demand for tech stocks. However, the rebound is not widespread as several market segments are still under pressure. Treasury yields have reached new highs, negatively impacting Real Estate and Utilities stocks, which are often favored for their dividends. The high yields on safe-haven assets like Treasuries make these stocks less attractive to investors. Additionally, Energy stocks are also facing pressure as oil markets decline due to concerns about rising yields and China’s economic problems.

From a technical standpoint, the SP500 has found support in the range of 4335 – 4350 and is now moving towards the nearest resistance level in the range of 4430 – 4450.

The NASDAQ index has gained strong upside momentum, driven by the rally in tech stocks. Leading this rally are heavyweights like NVIDIA and Tesla, both of which saw gains of more than 6% in today’s trading session. The increasing demand for these key stocks is optimistic for the entire NASDAQ index.

The NASDAQ may encounter resistance near the 50-day moving average at 14,990. If it manages to settle above this level, it will head towards the next resistance level in the range of 15,200 – 15,300.

On the other hand, the Dow Jones index continues to struggle to stay below the support level of 34,500 – 34,600. The market demand is primarily concentrated in tech stocks, which is bearish for the Dow Jones. As a result, most Dow Jones components are moving lower.

If the Dow Jones remains below the 34,500 level, it will likely head towards the next support level in the range of 33,600 – 33,700. The Relative Strength Index (RSI) has recently moved back into the moderate territory, indicating the potential for further downside momentum.

For a comprehensive overview of today’s economic events, please refer to our economic calendar.

Definitions:

  • SP500: A stock market index that measures the performance of 500 large companies listed on stock exchanges in the United States.
  • Tech stocks: Stocks of companies operating in the technology sector, which may include companies involved in software development, electronics manufacturing, and internet services, among others.
  • Treasury yields: The return on investment for government-issued securities, specifically U.S. Treasury bonds, notes, and bills.
  • Real Estate stocks: Stocks of companies involved in the ownership, development, and management of real estate properties.
  • Utilities stocks: Stocks of companies providing basic services such as electricity, gas, and water.
  • NASDAQ: A stock market index that tracks the performance of more than 3,000 companies listed on the NASDAQ stock exchange, with a focus on technology and growth companies.
  • Dow Jones: A stock market index that represents the performance of 30 large, publicly-owned companies listed in the United States.
  • Resistance level: A price level at which selling pressure may exceed buying pressure, potentially causing a pause or reversal in an upward price trend.
  • Support level: A price level at which buying pressure may exceed selling pressure, potentially causing a pause or reversal in a downward price trend.
  • Relative Strength Index (RSI): A technical indicator that measures the speed and change of price movements, indicating whether a security is overbought or oversold.

Sources:
No specified sources