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NASDAQ Index, SP500, Dow Jones Forecasts: Tech Sector and Treasury Yields in Focus
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Amidst rising Treasury yields and a tech sector pullback, the Dow, NASDAQ, and S&P 500 exhibit caution as markets reassess Fed rate cut bets.
Key Insights
- The Dow closes lower, facing tech sector pullback amid rising Treasury yields.
- NASDAQ impacted by declines in major tech companies, including Apple.
- S&P 500 (SPX) shows minor retreat, eyes resistance at $4,610.
- Corporate developments influence stock movement; Spotify and Virgin Galactic see notable shifts.
- Market sentiment cautious, reflecting reevaluation of Fed rate cut forecasts.
Quick Fundamental Outlook
On Monday, the Dow closed lower, trimming earlier losses despite a downturn in tech stocks driven by rising Treasury yields. The tech sector, recently on an upward trend, paused as investors reevaluated their rate cut expectations in light of upcoming economic data, including Friday’s crucial U.S. jobs report.
The yield on the 10-year Treasury increased, reflecting skepticism about the rapid shift in market expectations for Federal Reserve policy adjustments.
NASDAQ was affected by declines in major tech companies like Alphabet and Apple, the latter also impacted by potential iPhone production disruptions in India.
Meta Platforms dropped following CEO Mark Zuckerberg’s share sales.
Meanwhile, Spotify’s shares rose after announcing job cuts, and Virgin Galactic’s shares fell following Richard Branson’s decision against further investments. Alaska Air’s acquisition of Hawaiian Holdings led to a decrease in its stock, while Ford saw gains due to robust hybrid vehicle sales despite a slight overall sales drop.
The overall market sentiment, particularly for the Dow, NASDAQ, and S&P 500 (SPX), reflects caution and a reevaluation of rate cut forecasts, influenced by key economic indicators and corporate developments.
SPX SP500 Prices Forecast
The S&P 500 Index (SPX) showed a minor retreat, dropping by 0.54% to settle at 4,569.77 as of December 5. This movement reflects a cautious sentiment in the market, with investors closely monitoring key technical levels.
The pivot point for SPX is currently positioned at $4,530, with the index encountering immediate resistance levels at $4,610, $4,693, and $4,764. In case of a downturn, support levels are observed at $4,461, $4,384, and $4,313.
The Relative Strength Index (RSI) stands at 67, indicating a slightly bullish but approaching overbought territory. The Moving Average Convergence Divergence (MACD) reading of -6.14 below its signal line at 35 suggests a potential shift towards bearish momentum.
Significantly, the SPX trades above its 50-Day Exponential Moving Average (EMA) of $4,425, which typically signals a bullish trend, yet the double top pattern extending resistance at $4,600 could pose a challenge to upward movements.
Given these indicators, the SPX appears to have a bullish bias above the pivot point of $4,530. However, investors should exercise caution and be prepared for possible tests of resistance levels in the short term, while also being mindful of potential reversals due to the nearing overbought conditions and the observed double top pattern.
Dow Prices Forecast
The Dow Jones Industrial Average slightly edged down to 36,148.32, marking a minimal decrease of 0.09% as of December 5. This minor fluctuation occurs within a broader context of cautious market sentiment.
The pivot point is currently set at $36,251, with the index facing immediate resistance levels at $36,820, $37,311, and $37,798. On the downside, support levels are identified at $35,682, $34,997, and $34,363.
The Relative Strength Index (RSI) is notably high at 76, suggesting overbought conditions that might lead to a potential correction. The MACD, at -23.04 with a signal line of 160, indicates a bearish sentiment, further suggesting a possible shift in the trend.
The index is trading above its 50-Day Exponential Moving Average (EMA) of $34,622, which traditionally signals a bullish trend, but the high RSI and negative MACD hint at a bearish undertone.
Given these technical indicators, a cautious outlook is advisable for the Dow. The market might experience a correction with potential targets around the Fibonacci levels of $35,600 or $35,000, before any significant bullish momentum can be expected.
The overall trend remains bearish below the $36,250 mark, and investors should be prepared for potential resistance tests in the near term.
NASDAQ Prices Forecast
On December 5, the NASDAQ Composite Index reflected a subtle yet notable upward shift, closing at 14,185.49, despite a minor decline of 0.84%. The current market dynamics place the index in an intriguing position for both short and long-term investors.
Key technical indicators reveal a pivot point at $14,367, with immediate resistance levels at $14,648, $14,806, and $15,014. Should the index experience a pullback, it would find support at $14,051, $13,802, and $13,505.
The Relative Strength Index (RSI) stands at 54, hovering just above the midpoint, suggesting a cautiously bullish sentiment. The MACD value of -38.82, with a signal of 94.49, indicates mixed signals for potential momentum.
Significantly, the NASDAQ is trading above its 50-Day Exponential Moving Average (EMA) of $13,926, reinforcing a bullish outlook in the short term.
The current trend points towards bullishness above the $14,360 mark, with expectations of testing higher resistance levels. Investors should stay alert for any shifts that might indicate a change in this upward trend.
For a look at all of today’s economic events, check out our economic calendar.
About the Author
Arslan Aliauthor
Arslan is a finance MBA and also holds an MPhil degree in behavioral finance. An expert in financial analysis and investor psychology, Arslan uses his academic background to bring valuable insights about market sentiment and whether instruments are likely to be overbought or oversold.
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