Nasdaq Posts a Record While the Dow Turns Lower
The Nasdaq cleared its all-time high in the first hour Tuesday. The S&P 500 crossed a swing top and changed the main trend to up. The Dow opened higher, reached 52,319.01, stopped just short of the 52,326.70 level, and reversed. Two indices are making progress. The third is giving back Monday’s gains while sitting below its 50-day moving average.
At 14:24 GMT, the Nasdaq Composite is trading 27,218.84, up 96.75 points or 0.36%. The S&P 500 is at 7,768.06, up 3.36 points or 0.04%. The Dow Jones Industrial Average is at 51,854.87, down 193.96 points or -0.37%.
The Nasdaq Took Out the Record and Kept Going
The Nasdaq reached 27,250.92 Tuesday morning, through the prior all-time high at 27,190.21. The index spent last week recovering the 50-day moving average, cleared a string of swing tops Monday, and finished the job Tuesday. Three sessions of work and the breakout came through clean.
Sandisk is up about 7% after a Rosenblatt bullish call. Alibaba is higher after announcing plans to operate more than 20 gigawatts of data center capacity globally by 2032 and introducing its Zhenwu V900 chip. Vicor is rising after raising its third-quarter revenue outlook. Storage, cloud capacity, and power equipment. Three different parts of the same AI buildout and the money is still flowing through all of them.
The Nasdaq does not need every technology stock to move for the index to make a new high. It needs the largest names to keep holding gains. Tuesday says they are still doing that. Communication services are leading S&P 500 sectors with a 1.12% gain. Technology is positive. The bid is concentrated in growth and data center spending.
The Nasdaq main trend is up. The breakout through 27,190.21 leaves the index at a new all-time high. The former high becomes the first support level on any pullback. The 50-day moving average at 26,115.30 is well below the market.
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See all Dow Jones forecastsThe S&P 500 Changed Trend but the Sector Board Is Split
The S&P 500 Index is barely positive on the day because the move is narrow. Communication services, materials, consumer staples, consumer discretionary, technology and utilities are higher. Financials are down 1.45%. Industrials are lower. Energy is lower with crude oil working on its fifth straight losing session. Health care and real estate are soft.
Five of 11 sectors are lower, but financials are doing most of the damage. The S&P 500 changed trend on the backs of growth and communications while the sector board remains split. The index can still reach the August high with that kind of leadership. The problem comes if the Nasdaq keeps making records and the S&P 500 cannot get through 7,816.70. Then the rally starts narrowing back to a small group of names.
The S&P 500 reached 7,782.19 early Tuesday, taking out the 7,771.48 swing top. That changed the main trend to up on the daily swing chart. The August high at 7,816.70 is the next test.
Lower Oil and Yields Opened the Door for Technology
Crude oil is down again after the unverified Kyodo News report that Iran could reopen the Strait of Hormuz within seven days. Brent is near 98.50. WTI is near 93.50. Five straight sessions of losses.
The 10-year Treasury yield is trading near 4.95% after reaching 5.041% last week. Cheaper crude and lower yields are giving the growth trade room to run. That is the part of the market that reacts first when inflation pressure appears to ease.
Chicago Fed President Austan Goolsbee is still talking about demand and data center construction adding to inflation pressure. He did not sound like an official stepping back from tightening. New York Fed President John Williams and Richmond Fed President Tom Barkin are also on the schedule. The oil and yield relief is real for the session. The Fed has not changed direction. Every comment from Williams and Barkin gets traded against Tuesday’s move.
The Dow Stopped at Resistance and Turned Lower
The Dow reached 52,319.01 in early trading and stopped just short of 52,326.70. Then it reversed. The index is still below its 50-day moving average at 52,856.97 and below the retracement level. That puts the Dow in a different position from the Nasdaq and the S&P 500.
Support is at 51,756.14 with the swing bottom at 51,186.67 below it. The Dow is carrying the financials and industrials weight. Lower yields are helping the Nasdaq. They are not helping bank stocks. Lower oil is helping margins and inflation expectations. It is not helping the energy names inside the Dow.
One index is making a new record. One changed trend to up. The third is trying to get back above its 50-day moving average and failed at the first resistance level Tuesday morning. That is the divergence the market has to resolve this week.
What to Watch
The Iran report moved crude without confirmation. A denial, a fresh threat, or evidence that Hormuz remains restricted puts the oil premium back in the market and tests whether the technology bid holds. Williams and Barkin are the Fed voices Tuesday. The market is getting a break from yields. It is not getting a Fed that changed direction.
More Information in our Economic Calendar.
