NASDAQ Index, SP500, Dow Jones Forecasts – Major Indices Decline As Treasury Yields Test New Highs

Key Insights

• SP500 reacts to rising Treasury yields; 10-year surpasses 4.30% mark today.
• NASDAQ, down 7.4% from July highs, nears support at 14,560-14,680 amid rising yields.
• Despite Cisco’s almost 4% surge, most Dow Jones components end lower in the session.

SP500

SP500 retreats as traders focus on rising Treasury yields. Today, the yield of 10-year Treasuries moved above the 4.30% level, while the yield of 30-year Treasuries settled above 4.40%. While yesterday’s FOMC Minutes did not contain major surprises, traders are worried that Fed may raise rates at the next meetings. FedWatch Tool indicates that there is a 55.7% probability that the federal funds rate will remain unchanged by the end of the year, but markets are nervous. Most market segments are under pressure, but Energy stocks are moving higher as oil markets rebound after the recent sell-off.

SP500 managed to settle below the previous support at 4430 – 4450 and is moving towards the next support level, which is located in the 4335 – 4350 range. RSI remains in the moderate territory, so there is plenty of room to gain additional downside momentum.

NASDAQ

NASDAQ moved closer to the support at 14,560 – 14,680 as traders reacted to rising Treasury yields. The pullback continues, and NASDAQ is already down by 7.4% from July highs.

It should be noted that RSI has already moved into the oversold territory, so it remains to be seen whether NASDAQ will be able to settle below the support at 14,560 – 14,680 in the near term.

Dow Jones

Dow Jones has also gained downside momentum in today’s trading session. The rally in Cisco shares, which were up by almost 4%, did not provide enough support to the index as the majority of Dow Jones components moved lower.

The nearest support level for Dow Jones is located in the 34,500 – 34,600 range. A move below this level will provide Dow Jones with an opportunity to gain additional downside momentum.

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