NASDAQ Index, SP500, Dow Jones Analysis – SP500 Tests Yearly Highs

Key Insights

• SP500 moved above the 4450 level as traders focused on the PCE Price Index report. 
• NASDAQ rallied towards the 15,200 level. 
• Dow Jones moved closer to the resistance in the 34,500 – 34,600 range. 

SP500

SP500 is trying to settle above the 4450 level as traders react to the PCE Price Index report. The report showed that PCE Price Index declined from 4.3% in April to 3.8% in May, compared to analyst consensus of 3.9%. The Fed uses PCE Price Index to measure inflation, so the dynamics of the index serve as an important catalyst for major indices. It remains to be seen whether Fed will change its mind and leave the federal funds rate unchanged at the next meeting, but bulls are happy to see that PCE Price Index is declining.

Taking a look at the daily chart, SP500 will move towards the next strong resistance area in the 4575 – 4600 range in case it settles above the 4450 level. RSI is close to the overbought territory but there is enough room to gain additional momentum.

NASDAQ

NASDAQ is also close to yearly highs. Demand for tech stocks stays strong despite problems in U.S. – China relations, which may lead to additional export controls and hurt the business of semiconductor companies. Traders bet that AI boom will create enough demand to offset the negative impact of export controls on China.

NASDAQ needs to settle above the 15,300 level to continue the current trend. In case it manages to settle above this level, it will head towards the next resistance in the 15,900 – 16,000 range.

Dow Jones

Dow Jones has also managed to gain strong upside momentum amid a broad rally in the equity markets.

The high RSI is the main problem for the bulls. At this point, it looks that Dow Jones will need to stabilize near current levels before it will have a chance to climb above the resistance in the 34,500 – 34,600 area.

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