NASDAQ Index, SP500, Dow Jones Forecasts – NASDAQ Retreats As Alphabet Dives 6.5%

Key Insights

• SP500 is moving lower as traders focus on the disappointing ADP Employment Change report. 
• NASDAQ declined due to the sell-offs in AI-related stocks. 
• Dow Jones managed to stay in the positive territory, supported by the strong performance of Boeing stock.

SP500

SP500 is losing ground as traders react to the weaker-than-expected ADP Employment Change report, which indicated that private businesses added 107,000 jobs in january. Analysts expected ADP Employment Change of +145,000. Treasury yields are moving lower as bond traders prepare for the Fed decision, which will be released soon. The federal funds rate is expected to remain unchanged, so traders will focus on Powell’s comments during the press conference. Equity markets remain near historic highs so hawkish comments may trigger a sell-off.

SP500 moved below the support at 4900 – 4910 and is trying to settle below the 50 MA at 4885. In case this attempt is successful, SP500 will gain additional downside momentum and move towards the next support level, which is located in the 4850 – 4865 range.

NASDAQ

NASDAQ is under pressure as traders focus on the sell-off in Alphabet stock. The shares of Google’s parent are down by 6.5% after the release of the earnings report. Microsoft is also moving lower after the earnings report. The expectations were elevated as traders bet on AI-related stocks. The reports failed to meet these expectations, although both companies beat analyst estimates.

In case NASDAQ declines below the recent lows near the 17,200 level, it will head towards the support at 16,950 – 17,000.

Dow Jones

Dow Jones is mostly flat, supported by the strong rebound in Boeing stock. Boeing is moving higher after beating analyst estimates. The company suspended guidance due to the problems of 737 Max, but investors remained optimistic.

From the technical point of view, Dow Jones remains overbought, so the risks of a pullback are increasing. The upcoming Fed decision will serve as the key catalyst for Dow Jones today, so traders should be prepared for fast moves.

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