Nasdaq 100, Dow Jones, S&P 500 News: Showing Subdued Results Amid Tech Volatility

James Hyerczyk
Published: Apr 22, 2024, 15:38 GMT+00:00

Key Points:

  • Nasdaq 100's dip influences overall U.S. market downturn.
  • Hawkish Fed, anticipated PCE index release shape policy views.
  • Defensive market strategies favored amid earnings uncertainty.
Nasdaq Composite, S&P 500, Dow Jones

In this article:

Market Overview

U.S. stock indexes displayed mixed results on Monday, as the Nasdaq 100’s downturn impacted the overall market, pulling the Dow and S&P 500 away from their daily highs. This follows a challenging week, marking the worst of the year for U.S. stocks, with investors anticipating a heavy week of corporate earnings. Notably, the S&P 500 narrowly rose by 0.2%, trying to recover from a six-day losing streak and its close below 5,000 last Friday—the first since February.

At 15:26 GMT, the blue chip Dow is trading 38016.58, up 30.18 or +0.08%. The benchmark S&P 500 Index is at 4976.75, up 9.52 or +0.19%. The tech-heavy Nasdaq 100 flipped back to the upside after a short dip, trading 15299.88, up 17.87 or +0.12%.

Sector Specific Movements

The technology sector showed signs of volatility, particularly influenced by poor earnings from Netflix, which affected broader market sentiments. In contrast, Nvidia saw a rebound, with shares up by more than 3% after a significant drop last Friday. This sector’s performance is critical as other major tech firms like Meta, Microsoft, and Alphabet are scheduled to report their earnings later in the week. Meanwhile, Tesla’s stock continued to decline, impacted by price cuts and ongoing investor concerns over strategic decisions.

Economic Indicators and Fed Policy

The focus also remains on economic indicators and the Federal Reserve’s monetary policy. The Fed has turned more hawkish, with recent comments suggesting a reluctance to cut interest rates amidst persistent inflation. This week, the release of the Personal Consumption Expenditures (PCE) index, the Fed’s preferred inflation measure, is highly anticipated. It could influence the Fed’s policy decisions in the upcoming months, particularly with a core PCE increase expected to be around 0.3% for March.

Earnings Impact

Thus far, the earnings season has not met investor expectations, which could be contributing to the market’s cautious stance. Reports from 65 S&P 500 companies have shown mixed reactions, with stocks not responding strongly to positive earnings surprises. This suggests that high valuations might be tempering the positive impact of earnings beats.

Short-Term Market Forecast

The market appears to be at a pivotal point, with upcoming big tech earnings and economic reports likely to dictate the short-term trajectory. Given the uncertain reaction to earnings and hawkish Fed signals, the market outlook remains bearish. Investors might consider defensive strategies, focusing on sectors like Health Care and Consumer Staples, which typically offer stability in turbulent times.

Daily E-mini Nasdaq-100 Index

E-mini Nasdaq-100 Index futures are slightly up on Monday as investors adjust positions before significant earnings reports. The 200-day moving average at 17289.00, up by 108.25 or +0.63%, guides the market’s long-term trend. Lacking a strong support base, expectations for a robust rally are muted, with immediate resistance found at the 50-day moving average of 18205.29.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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