NASDAQ Index, SP500, Dow Jones Analysis – Dow Jones Tests Yearly Highs

Key Insights

• SP500 is moving towards the resistance at 4575.
• NASDAQ rebounded from session lows and settled back above the 15,450 level.
• Dow Jones tested new highs as the rally continued.

SP500

SP500 is moving higher as traders react to U.S. PMI reports. Manufacturing PMI increased from 46.3 in June to 49 in July, while Services PMI declined from 54.4 to 52.4. Treasury yields moved higher as bond traders prepared for the Fed Interest Rate Decision, which will be released on Wednesday. Interestingly, rising Treasury yields did not put any pressure on major indices. Energy stocks were among the biggest gainers in SP500 today. Demand for energy stocks increased amid a strong rally in the oil markets.

Taking a look at the daily chart, RSI remains in the overbought territory. However, RSI has moved away from recent highs, so SP500 has a decent chance to climb above the nearest resistance, which is located in the 4575 – 4600 range.

NASDAQ

NASDAQ moved higher, supported by the strong rebound in Tesla stock. It should be noted that demand for tech stocks was limited as traders remained cautious ahead of the Fed decision.

From the technical point of view, NASDAQ is trying to stabilize after the recent pullback. It remains to be seen whether NASDAQ will be ready to gain upside momentum ahead of the Fed decision, which may have a material impact on the yield-sensitive tech stocks.

Dow Jones

Dow Jones tests new highs as the rally continues. Today’s rally is broad as the majority of the index components are moving higher. RSI has moved back into the overbought territory on the 4h chart.

RSI has also reached overbought levels on the daily chart, so the risks of a pullback are rising. In this situation, Dow Jones may be extremely sensitive to the upcoming Fed decision.

For a look at all of today’s economic events, check out our economic calendar.