NASDAQ Index, SP500, Dow Jones Analysis – NASDAQ Soars As AI Boom Boosts Tech Stocks

Key Insights

• SP500 tested the 4200 level on optimism about debt ceiling negotiations. 
• NASDAQ rallied to new highs amid high demand for AI stocks. 
• Dow Jones moved back above the 33,000 level.

SP500

SP500 is trying to settle above the 4200 level as traders bet that Republicans and Democrats will reach consensus on the debt ceiling deal. According to recent reports, the parties have made progress but ‘major issues’ remained. At this point, the market is almost completely sure that U.S. will raise the debt ceiling in time to avoid a default. Today, traders also focused on the PCE Price Index report, which is Fed’s favorite inflation gauge. The report showed that PCE Price Index increased from 4.2% in March to 4.4% in April, which was a surprise as analysts expected that it would fall to 4.1%. Rising prices may force Fed to raise the rates this summer, which will be bearish for stocks. Traders have mostly ignored the report as they remained focused on debt ceiling negotiations.

In case SP500 manages to settle above the 4200 level, it will head towards the resistance at 4215. A successful test of this level will push SP500 towards the 4250 level.

R1:4200 – R2:4215 – R3:4250

S1:4175 – S2:4150 – S3:4115

NASDAQ

NASDAQ continues to move higher, boosted by the AI boom. Marvell Technology, which is up by 30%, is the biggest gainer in the NASDAQ index today. The stock rallied after the company reported its quarterly results and noted that AI was a key growth driver.

A successful test of the 14,300 level will push NASDAQ towards the next resistance level at 14,450. In case NASDAQ manages to settle above this level, it will head towards the resistance at 14,600.

R1:14,300 – R2:14,450 – R3:14,600

S1:14,100 – S2:13,900 – S3:13,700

Dow Jones

Dow Jones gained ground amid a broad market rebound. The rebound was led by Intel. The stock gained 4% as traders bet on a rebound after the recent pullback, which was triggered by NVIDIA‘s strong results.

In case Dow Jones settles above the resistance at 33,175, it will move towards the next resistance level at 33,300. A successful test of this level will open the way to the test of the 33,500 level.

R1:33,175 – R2:33,300 – R3:33,500

S1:33,000 – S2:32,800 – S3:32,600

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