NASDAQ Index, SP500, Dow Jones Forecasts – NASDAQ Pulls Back As Tesla Dives 12.7%

Key Insights

• SP500 moved higher as traders focused on the strong GDP data. 
• NASDAQ is under some pressure due to the major sell-off in Tesla stock. 
• Dow Jones is trying to stay above the support at 37,750 – 37,800 as IBM tests multi-year highs. 

SP500

SP500 gained some ground, supported by the strong GDP Growth Rate report. The report indicated that GDP Growth Rate was 3.3% in the fourth quarter, compared to analyst consensus of 2%. Initial Jobless Claims increased from 187,000 to 214,000, while analysts expected that they would grow to 200,000. Traders also had a chance to take a look at the Durable Goods Orders report, which showed that Durable Goods Orders remained unchanged in December. New Home Sales increased by 8% month-over-month in December, in line with analyst expectations. Interestingly, Treasury yields moved lower despite the encouraging economic data. Falling Treasury yields provided additional support to SP500.

From the technical point of view, SP500 consolidates below the 4900 level. RSI has moved back into the moderate territory, so there is plenty of room to gain additional upside momentum.

NASDAQ

NASDAQ moved away from session highs due to the strong sell-off in Tesla stock. Tesla is down by 12.7% as traders react to the disappointing earnings report. Elon Musk said that Chinese EV producers would demolish most competitors unless they are protected by trade barriers, which raised worries about Tesla’s ability to thrive in a competitive market.

If NASDAQ pulls back below the support at 17,450 – 17,500, it will head towards the next support level, which is located in the 16,950 – 17,000 range.

Dow Jones

Dow Jones gained some ground, supported by the strong rally in IBM stock. IBM is up by 10.00% after the earnings report as traders bet that demand for AI products would boost the company’s performance. Traders should note that IBM tests levels that were last seen back in 2013!

Dow Jones needs to stay above the support at 37,750 – 37,800 to have a chance to gain upside momentum in the near term.

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