NASDAQ 100, Dow Jones, S&P 500 News: Oil, Surging Rates, Politics Setting a Bearish Tone

Highlights

• S&P 500 decline underscores market’s jitters over climbing rates this quarter.
• U.S. 10-year Treasury yield’s 15-year high signals strong labor market but spurs recession fears.
• Q2 GDP growth of 2.1% falls short of Dow Jones’ estimates, raising eyebrows.
• Micron’s dip contrasts GameStop’s surge amidst corporate changes; Duolingo gains UBS favor.

Markets Tense Amid Rising Rates and Economic Indicators

The S&P 500 is lower shortly after the opening on Thursday, a reflection of the broader market’s concerns over the increasing rates that have characterized a turbulent month and quarter for equities. The Dow Jones Industrial Average saw a slight uptick, while the Nasdaq Composite dipped modestly. This market behavior is notably influenced by the 15-year high of the U.S. 10-year Treasury yield, signifying a buoyant labor market but causing anxiety about potential recessions.

Significant Stock Movements

Several companies stood out ahead of the trading bell. Micron’s shares saw a dip following an underwhelming earnings forecast, while GameStop surged on the back of CEO changes. Duolingo’s shares ascended after positive remarks from UBS, and CarMax experienced a drop due to weaker fiscal second-quarter earnings. Notably, Peloton and Lululemon’s collaboration spurred Peloton’s stocks to jump.

Economic Updates and Impact

The second quarter GDP figures held steady at a 2.1% growth, even though it missed Dow Jones’ estimate. The government made significant cuts to the GDP readings of the first quarter from 2020 to 2022, and jobless claims came in below expectations. As the week ends, investors keenly await the personal consumption expenditures price index data, an inflation metric that the Federal Reserve closely monitors.

Oil Prices and Government Deliberations

Oil prices witnessed a surge, hitting a yearly high after a marked decrease in crude inventories. On the political front, House Speaker Kevin McCarthy expressed concerns about the Senate’s funding bill’s approach to border security. This criticism comes amid ongoing negotiations in Washington regarding the U.S. spending bill, with an impending October 1 deadline.

Short-Term Forecast

In conclusion, the market sentiment is tense, with an underlying bearish tilt due to rising rates. As investors brace for the month’s end, critical economic data and political decisions in the coming days will further shape the trajectory.

Technical Analysis

The Nasdaq 100 Index is currently trading at 14671.75, displaying some signs of potential weakness. Positioned between its 50-Day moving average of 15295.57 and 200-Day moving average of 13640.68, it remains below the shorter-term average, indicating bearish momentum in recent trading sessions.

The 14-Day RSI stands at 34.98, approaching the oversold threshold but not yet crossing it, suggesting a diminished momentum but not a complete bearish reversal.

The current sentiment leans slightly bearish, with a vigilant outlook for potential shifts in the market dynamics.

The large space on the charts between the current price and the 200-day moving average at 13640.68, makes the index vulnerable to a steep near-term correction.