NASDAQ Index, SP500, Dow Jones Forecasts – Dow Jones Retreats As Boeing Dives 7.2%

SP500

SP500 is losing ground as traders focus on strong PMI reports. Manufacturing PMI increased from 50.0 in April to 50.9 in May, while Services PMI grew from 51.3 to 54.8. The strength of the services sector indicates that Fed may be forced to keep rates at high levels for longer to fight inflation. Today, traders also had a chance to take a look at the New Home Sales report for April. The report indicated that New Home Sales declined by 4.7% month-over-month, compared to analyst consensus of -1.4%. Treasury yields moved higher as bond traders reacted to economic reports. The yield of 2-year Treasuries climbed above the 4.90% level, while the yield of 10-year Treasuries settled near 4.48%. From a big picture point of view, stock traders are worried that rates will stay high longer than previously expected, so they take profits near historic highs.

Currently, SP500 is trying to settle below the support at 5270 – 5280. In case this attempt is successful, SP500 will head towards the next support level, which is located in the 5180 – 5190 range.

NASDAQ

NASDAQ moved lower as traders focused on rising Treasury yields. The strong performance of NVIDIA stock did not provide sufficient support to the index. NVIDIA is up by 8.3% as traders react to the strong quarterly report. The stock has managed to settle above the psychologically important $1000 level.

In case NASDAQ settles back below the 50 MA at 18,567, it will head towards the nearest support level at 18,300 – 18,400. RSI is in the moderate territory, so there is plenty of room to gain additional downside momentum.

Dow Jones

Dow Jones is under strong pressure as Boeing stock is down by 7.2%. Boeing’s CFO said the the company’s cash flow and production problems would continue in the current quarter. Not surprisingly, the market was not happy to hear these words, so traders rushed to close their long positions in Boeing.

A successful test of the support at 39,000 – 39,100 will open the way to the test of the next support level at 38,500 – 38,550. Traders should note that RSI is in the oversold territory, so the risks of a rebound are increasing.

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