NASDAQ Index, SP500, Dow Jones Forecasts – Stocks Rally As Inflation Rate Drops To 3.2%

Key Insights

• SP500 moved towards the 4500 level as Treasury yields dived after inflation reports. 
• NASDAQ rallied towards the 15,800 level as traders bet on a more dovish Fed. 
• Dow Jones made an attempt to settle above the 34,800 level. 

SP500

SP500 rallies as traders react to CPI reports. Inflation Rate declined from 3.7% in September to 3.2% in October, compared to analyst consensus of 3.3%. Core Inflation Rate decreased from 4.1% to 4.0%, compared to analyst expectations of 4.1%. Treasury yields tested new lows after the release of inflation data as traders bet that Fed will not raise rates again. The market expects that Fed will start cutting rates in May 2024. Today’s rally is broad, and all market segments are moving higher. Real Estate stocks, which are extremely sensitive to the changes in Treasury yield dynamics, are among the biggest gainers today.

In case SP500 manages to settle above the 4500 level, it will head towards the next resistance, which is located in the 4575 – 4600 range. RSI has recently moved into the extremely overbought territory, so the risks of a pullback are rising.

NASDAQ

NASDAQ tested new highs as traders cheered inflation data. Just four stocks in the NASDAQ index have found themselves under pressure in today’s trading session.

NASDAQ needs to settle above the resistance at 15,800 – 15,900 to continue the rally. However, NASDAQ is overbought, so a minor pullback may be required for a successful test of the 15,900 level.

Dow Jones

Dow Jones tested new highs amid a broad rally in the equity markets. Home Depot, which is up by more than 6%, is the best performer in the Dow Jones index today. The stock gained strong upside momentum as the company’s earnings exceeded analyst estimates.

In case Dow Jones settles above the resistance at 34,650 – 34,800, it will head towards the next resistance level, which is located in the 35,550 – 35,700 range.

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