Nasdaq 100, Dow Jones, S&P 500 News: Cautious Trade as Investors Eye Fed Policy, Jobs Data

Overview- Early Weakness

Wall Street witnessed a modest retreat in its main indexes on Monday, following record highs in the S&P 500 and Nasdaq. This pullback reflects a cautious stance among investors at the start of a week heavy with crucial job data and Federal Reserve Chair Jerome Powell’s testimony to Congress.

At 16:00 GMT, the Dow Jones Industrial Average is trading 38967.24, down 120.14nas or -0.31%. The S&P 500 Index is at 5131.57. down 5.51 or -0.11% and the Nasdaq is trading 16236.95, down 38.00 or -0.23%.

Record-Breaking Rallies

The Nasdaq commenced March by achieving an intraday all-time high last Friday, marking its highest closing for the second consecutive day, largely propelled by a surge in AI-driven technology stocks. Similarly, the S&P 500 has been on an impressive rally, with BofA Global Research increasing its year-end target for the index to 5,400, up from 5,000, suggesting a 5% potential growth from the current levels.

Economic Data and Federal Reserve Stance

Investors are keenly observing key economic indicators such as monthly non-farm payrolls, JOLTS job openings, and the ADP National Employment report. Additionally, the Fed’s “Beige Book” is also in focus for insights into the economy’s performance. Expectations for rate cuts by the Federal Reserve have been moderated in light of a stronger-than-anticipated economy, which poses a risk of reigniting inflation if policies are relaxed prematurely.

Corporate and Sector Movements

Notably, most mega-cap stocks, including Apple, experienced a downtick. Apple’s 2.1% decline followed a substantial EU antitrust fine. In contrast, Nvidia outshone its peers with a 3.2% rise after its market value surpassed $2 trillion. Chipmakers like Micron Technology and Taiwan Semiconductor Manufacturing also saw gains. The retail sector saw a significant move with Macy’s stock jumping 16.4% after a raised acquisition offer.

Cryptocurrency Boost

Cryptocurrency and blockchain-related firms enjoyed gains, with companies like Coinbase Global and Marathon Digital climbing between 3.7% and 7.1%. This surge correlated with Bitcoin’s rally to a two-year high, surpassing $65,000.

Market Sentiment and Forecast

The market sentiment appears mixed, with a slight predominance of declining issues on the NYSE, while the Nasdaq experienced more advancers. The S&P index recorded multiple new 52-week highs. Short-term, the market outlook is cautiously optimistic, buoyed by the technology sector’s robust performance and investor interest in cryptocurrencies. However, upcoming economic data and Fed policies will be critical in shaping the market’s direction, potentially swaying it towards a bullish trend if positive.

Technical Analysis

E-mini S&P 500 Index futures are edging lower on Monday as we approach the mid-session. A trade through 5149.25 will signal a resumption of the uptrend. Taking out 5060.00 will change the short-term trend to down.

There is no resistance with the index at all-time highs. The major support is the uptrending 50-day moving average at 4921.84. A closing price reversal top would be a sign of weakness, but not a change in trend.