NASDAQ Index, SP500, Dow Jones Analysis – NASDAQ Retreats As Tech Stocks Remain Under Pressure

Key Insights

• SP500 made an attempt to settle below the 4450 level as the pullback continued. 
• NASDAQ tested new lows as traders continued to sell AI-related stocks. 
• Dow Jones remained range-bound as traders bought stocks from defensive sectors. 

SP500

SP500 pulled back as traders reacted to the higher-than-expected Producer Prices report. The report indicated that PPI increased by 0.3% month-over-month in July, compared to analyst consensus of +0.2%. Core PPI has also increased by 0.3%. The better-than-expected Michigan Consumer Sentiment report provided some support to major indices, although traders have mostly focused on the PPI numbers. Treasury yields moved higher as bond traders bet on a more hawkish Fed after the release of PPI data, which was bearish for stocks.

SP500 continues to pull back after the strong rally in the first half of the year. Finally, SP500 declined towards the support level in the 4430 – 4450 range. A move below the 4430 level will indicate that SP500 is ready to gain additional downside momentum. In this case, SP500 will head towards the next support at 4335 – 4350.

NASDAQ

NASDAQ remains under pressure as traders move out of the high-flying tech stocks. NVIDIA and Advanced Micro Devices have once again found themselves under pressure as traders sell AI-related stocks after the strong rally.

From the technical point of view, NASDAQ managed to settle below the previous support in the 15,200 – 15,300 range and is moving towards the next support level in the 14,560 – 14,680 area.

Dow Jones

Dow Jones gained some ground in today’s trading session as the majority of the index components moved higher. Disney was the only notable loser in the Dow Jones index today.

While SP500 and NASDAQ are moving lower, Dow Jones remains stuck in the range between the support at 35,000 and the resistance at 35,550. Dow Jones will likely gain strong momentum when it moves out of this trading range.

For a look at all of today’s economic events, check out our economic calendar.