NASDAQ Index, SP500, Dow Jones Analysis – Stocks Pull Back As Debt Ceiling Talks Pause

Key Insights

• SP500 declined below the 4200 level amid worries about the fate of debt ceiling negotiations. 
• NASDAQ pulled back as traders took profits after the recent rally. 
• Dow Jones settled back below the 33,500 level amid a broad pullback in equity markets. 

SP500

SP500 pulled back as Republicans and Democrats paused debt ceiling talks. The parties have little time before Treasury may face problems paying bills, which could happen as soon as June 1. Today, traders also focused on the comments from Fed Chair Jerome Powell. He was more dovish than expected, and the FedWatch Tool indicated that the probability of a rate hike at the next Fed meeting declined.

From the technical point of view, today’s pullbak looks healthy after the recent rally. RSI remains in the moderate territory, and there is plenty of room to gain additional upside momentum in the upcoming trading sessions.

R1:4200 – R2:4215 – R3:4250

S1:4175 – S2:4150 – S3:4115

NASDAQ

NASDAQ moved lower after an unsuccessful attempt to settle above the 13,900 level as traders decided to take some profits off the table after the recent rally.

The nearest support level for NASDAQ is located at 13,700. In case NASDAQ settles below this level, it will head towards the next support at 13,550. A successful test of the support at 13,550 will push NASDAQ towards the support at 13,400.

R1:13,900 – R2:14,100 – R3:14,300

S1:13,700 – S2:13,550 – S3:13,400

Dow Jones

Dow Jones tried to settle above the 33,500 level but lost momentum and pulled back. Nike, which is down by 3.5%, is the worst performer in the Dow Jones index today. The stock found itself under pressure after reports indicated that the company could face a $500 million fine over misclassifying temporary workers.

In case Dow Jones settles below the support level at 33,300, it will head towards the next support at 33,175. A move below this level will open the way to the test of the support at 33,000.

R1:33,500 – R2:33,800 – R3:34,000

S1:33,300 – S2:33,175 – S3:33,000

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