NASDAQ Index, SP500, Dow Jones Analysis – Stocks Retreat As Moody’s Cuts U.S. Bank Ratings

Key Insights

• SP500 settled below the 4500 level as traders reacted to Moody’s rating decisions. 
• NASDAQ pulled back as the appetite for risk decreased. 
• Dow Jones made an attempt to settle below the 35,000 level. 

SP500

SP500 pulled back as traders reacted to Moody’s decision to downgrade 10 U.S. banks. According to Moody’s, deposits will resume their decline in the upcoming quarters. Meanwhile, Italy imposed a surprise 40% tax on banks’ profits earned from higher interest rates, which has also hurt global risk appetite. In China, imports and exports fell faster than expected as the economy remained under pressure. In the U.S., IBD/TIPP Economic Optimism Index fell to yearly lows, missing analyst estimates. There was no shortage of bad news today, which was bearish for major indices.

The nearest significant support level for SP500 is located in the 4430 – 4450 range. A move below this range will open the way to the test of the support at 4335 – 4350.

NASDAQ

NASDAQ tested support at 15,200 – 15,300 as tech stocks pulled back. The appetite for risk decreased, which was bearish for NASDAQ. The pullback was broad, and the majority of NASDAQ components have moved lower in today’s trading session.

In case NASDAQ manages to settle below the support at 15,200, it will head towards the next support level, which is located in the 14,560 – 14,680 range.

Dow Jones

Dow Jones has also moved lower amid a broad pullback in the equity markets. Financial and Technology stocks were among the biggest losers in the Dow Jones index today.

From the technical point of view, Dow Jones is stuck in the range between the support at 35,000 and the resistance at 35,550. Dow Jones must get out of this range to gain additional momentum.

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