NASDAQ Index, SP500, Dow Jones Forecasts – Major Indices Fall As Tech Stocks Plummet

Key Insights

• SP500 retreats as traders sell tech stocks despite the strong report from NVIDIA.
• NASDAQ’s major slump indicates that market has priced in positive tech results; significant catalysts needed for a reversal.
• The Dow Jones index tests new lows, capturing the broad pullback sentiment, as most stocks face downward pressure.

SP500

SP500 found itself under strong pressure as traders rushed out of tech stocks. NVIDIA’s earnings report was strong, but traders decided to take profits in various tech stocks. NVIDIA pulled back from session highs but the stock is still up by 2% in today’s trading session. Today, traders also focused on the economic reprots. Initial Jobless Claims report showed that 230,000 Americans filed for unemployment benefits in a week, compared to analyst consensus of 240,000. Durable Goods Orders declined by 5.2% month-over-month in July, while analysts expected that they would decrease by 4%. It looks that traders are cautious ahead of Powell’s speech at Jackson Hole, which will be delivered tomorrow. Treasury yields have started to move higher again, so bond traders are not ready to bet on a less hawkish Fed.

SP500 failed to settle above the resistance at 4430 – 4450 and moved lower. The nearest support level for SP500 is located at 4335 – 4350. RSI remains in the moderate territory, so there is plenty of room to gain additional downside momentum in case the right catalysts emerge.

NASDAQ

NASDAQ suffered a sell-off due to the major pullback in tech stocks. Advanced Micro Devices, which was down by 7%, was among the biggest losers in the NASDAQ index today. The sell-off shows that NASDAQ will need significant catalysts to get back to the upside mode as the good results of tech companies have been already priced in by the market.

Currently, NASDAQ is trying to settle below the 50 MA at 14,970. In case this attempt is successful, it will head towards the support at 14,560 – 14,680.

Dow Jones

Dow Jones tested new lows amid a strong pullback in the equity markets. The pullback was broad, and the majority of Dow Jones stocks have found themselves under material pressure.

The nearest significant support level for Dow Jones is located in the 33,600 – 33,700 range. In order to have a chance to gain upside momentum, Dow Jones needs to climb back above the 34,600 level.

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