NASDAQ Index, SP500, Dow Jones Forecasts – Stocks Pull Back As Composite PMI Misses Estimates

By:

Vladimir Zernov

Published: Jan 24, 2025, 19:14 GMT+00:00

Key Points:

SP500 pulled back towards the 6100 level as traders reacted to economic reports.
NASDAQ moved lower as traders took profits in tech stocks.
Dow Jones declined as NVIDIA pulled back by 3.4%.

SP500

SP500 240125 4h Chart

SP500 pulled back from record highs as traders reacted to PMI reports. Manufacturing PMI increased from 49.4 in December to 50.1 in January, compared to analyst consensus of 49.7. Numbers above 50 show expansion. Services PMI decreased from 56.8 to 52.8, compared to analyst forecast of 56.5. The surprising decline in Services PMI put pressure on Composite PMI, which pulled back from 55.4 to 52.4. Today, traders also had a chance to take a look at Michigan Consumer Sentiment report for January. The report showed that Consumer Sentiment declined from 74.0 to 71.1, compared to analyst forecast of 73.2. Importantly, year-ahead inflation expectations increased from 2.8% in December to 3.3% in January. Treasury yields moved lower despite rising inflation expectations as bond traders focused on the weaker-than-expected Composite PMI report. However, falling yields did not provide support to stocks today.

If SP500 moves back below the resistance level at 6090 – 6100, it will head towards the nearest support level, which is located in the 6000 – 6010 range.

NASDAQ

NASDAQ 240125 4h Chart

NASDAQ is losing ground as traders focus on economic data and take profits after the strong rebound from January lows. Texas Instruments, which is down by 7.55%, is the worst performer in the NASDAQ index today. The stock found itself under pressure as traders focused on the disappointing Q1 profit forecast.

In case NASDAQ declines below the 21,700 level, it will move towards the support at 21,550 – 21,600. A move below the 21,550 level will open the way to the test of the 50 MA at 21,445.

Dow Jones

Dow Jones 240125 4h Chart

Dow Jones is losing ground amid broad pullback in the equity markets. The pullback is led by NVIDIA, which is down by 3.4% in today’s trading session.

If Dow Jones stays below the 44,400 level, it will head towards the nearest support level, which is located in the 44,000 – 44,100 range.

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

About the Author

Vladimir Zernovauthor

Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.