S&P 500 Is Losing Ground As Tech Stocks Retreat

Key Insights

• NVIDIA is down by 6% as semiconductor stocks remain under pressure. 
• Tesla settled below the $115 level amid worries about demand for the company’s cars. 
• A move below 3840 will push S&P 500 towards the support at 3815.

Tesla Tests New Lows

S&P 500 is losing ground in today’s trading session as tech stocks remain under material pressure. The tech-heavy NASDAQ Composite is down by 1%.

Treasury yields are moving higher as bond traders bet on a more aggressive Fed. Higher Treasury yields are bearish for yield-sensitive tech stocks.

Today’s pullback is led by Tesla, which is down by 8% amid worries about demand for the company’s cars. Recent reports indicated that prices for used Tesla cars are dropping at a robust pace, which is a negative catalyst for the sales of new cars.

NVIDIA and other semiconductor stocks have also found themselves under significant pressure as traders focus on weak demand and rising tensions with China.

Meanwhile, energy stocks are moving higher as WTI oil settled above the $80 level. Russia banned oil exports to countries that participate in the price cap scheme from February 1, 2023, providing additional support to oil markets and oil-related stocks.

Basic materials stocks are also among today’s leaders. In this market segment, the rebound is led by copper producer Freeport-McMoRan and gold producer Newmont Corporation.

S&P 500 Tests Support At 3840

Currently, S&P 500 is trying to settle below the 3840 level. RSI is in the moderate territory, and there is plenty of room to gain additional downside momentum in case the right catalysts emerge. If S&P 500 declines below 3840, it will head towards the next support level at 3815. A move below 3815 will push S&P 500 towards the support at 3800. In case S&P 500 gets below this level, it will head towards the next support, which is located near recent lows at 3775.

On the upside, S&P 500 needs to settle back above 3840 to have a chance to gain upside momentum in the near term. The next resistance level for S&P 500 is located at 3860. If S&P 500 manages to settle above this level, it will head towards the next resistance at 3890.

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