Nasdaq Index and S&P500: US Stocks Retreat From Record Highs as Oil and Yields Rise

Nasdaq and S&P 500 Form Minor Tops as Oil and Yields Turn Higher

The Nasdaq Composite Index made a new record Tuesday. The S&P 500 Index reached a new recovery high. By Wednesday morning both had formed minor tops and turned lower. The Dow Jones Industrial Average never joined the record move. It remains below its 50-day moving average and under the 52,326.70 level that stopped the last recovery attempt.

At 14:00 GMT, the Nasdaq Composite Index is trading 27,157.84, down 86.44 points or 0.32%. The session high is 27,217.33 and the low is 27,147.14. The S&P 500 Index is trading 7,737.88, down 26.76 points or 0.34%. The Dow Jones Industrial Average is at 51,730.29, down 133.40 points or 0.26%.

Tuesday’s Record Highs Turned Into Minor Tops

The Nasdaq Composite Index reached 27,288.79 Tuesday, through the prior record at 27,190.21. It did not hold. Wednesday’s trade created a minor top at 27,288.79. The main trend is still up on the daily swing chart. The index is above its 50-day moving average at 26,136.82 and well above the 200-day at 24,608.96. The high changed nothing about the larger trend. The minor top changed the immediate trade.

The first downside level is the 50% retracement at 26,545.88 from the 25,802.96 bottom to the 27,288.79 minor top. A normal pullback can reach that level without threatening the main trend. The 50-day sits below it.

The S&P 500 Index has the same setup. It reached 7,782.19 Tuesday and turned lower Wednesday, creating a minor top below the 7,816.70 main high. The 50% retracement of the 7,507.77 bottom to the 7,782.19 top is 7,644.98. The 50-day at 7,629.90 sits just below. Those two levels create the first support cluster if selling continues.

The Dow Is Still Below Its Moving Average

The Dow Jones Industrial Average reached 51,843.15 Wednesday and turned lower. It is below its 50-day moving average at 52,841.58 and below 52,326.70. The Dow traded through the 51,756.14 support level Wednesday and reached a session low at 51,658.13. That level is now the first recovery test. The 51,186.67 swing bottom is below.

The Dow is in a different position. The Nasdaq Composite Index and the S&P 500 Index are working through minor tops inside daily uptrends. The Dow is still trying to recover its 50-day after the earlier break. That matters for breadth. A rally can run with the Nasdaq leading. It gets harder to call broad when industrials, financials, utilities, and consumer names are not following.

Oil and Yields Came Back and Took Tuesday’s Trade Away

Treasury yields moved higher Wednesday. The 10-year rose above 4.99%. The two-year pushed to 4.81%. November Brent crude oil futures are near $100. November WTI crude oil futures moved above $91.

Lower oil and lower yields gave growth stocks room to run into the Nasdaq record Tuesday. Wednesday brought both back up. Buyers did not disappear. They stopped extending.

Utilities and consumer discretionary are down about 1%. Materials fell nearly 1%. Utilities react to yields. Consumer discretionary reacts to the cost of money. Materials trade with the oil and industrial cycle. The sector board is showing exactly what higher yields and higher crude do to the parts of the market that were not leading Tuesday’s rally.

U.S.-Iran talks are still running through mediators at the UNGA sessions. Nothing has been signed. The Nasdaq Composite Index ran to a record Tuesday while crude was falling and yields were dropping. Wednesday both reversed. The record move needs lower oil and lower yields to keep working. Wednesday is not providing either one.

Stocks in the News

Worthington Enterprises jumped 16% on an earnings beat. The number that moved the stock was demand for engineered tanks used in data-center liquid cooling. The AI infrastructure trade is still getting paid even on a down day for the indices.

IonQ is up about 12% after testing a real-time quantum error decoder. Rigetti Computing, D-Wave Quantum, and Infleqtion are higher with the quantum group.

KB Home is lower after its fourth-quarter delivery outlook came in below expectations and margins missed the Street. Six Flags is higher after a report that activist Jana Partners wants the company to explore a sale. Instacart is higher after adding Meta’s AI agent Muse to its grocery platform.

The board is mixed. Buyers are still taking individual stories. They are not paying up for every growth name at the same time. That is what the minor tops are reflecting.

What to Watch

The yield and oil trade is the first screen. The 10-year near 5% and Brent near $100 takes pressure off neither the Fed nor technology valuations. Lower oil gave the market a clean rally Tuesday. Higher oil and yields gave sellers a reason to show up Wednesday. The UNGA sessions in New York are live on the crude side. One Iran headline changed the trade Tuesday. The next one can change it again.

The Nasdaq Composite Index needs to hold above the 26,545.88 retracement level if the pullback expands. The 50-day at 26,136.82 sits below it. The S&P 500 Index has 7,644.98 with the 50-day at 7,629.90 below it. The Dow needs 51,756.14 and then 52,326.70 before the market can talk about broader participation. Until then the Nasdaq and S&P 500 are in uptrends with minor tops. The Dow remains the weak side of the trade.

More Information in our Economic Calendar.