NASDAQ Index, SP500, Dow Jones Analysis – NASDAQ Rallies As Inflation Slows Down

Key Insights

• SP500 settled above the 4500 level as PPI report showed that inflation slowed down. 
• NASDAQ tested new highs as traders bet on a less hawkish Fed after the release of PPI data. 
• Dow Jones remained stuck below the 34,500 level. 

SP500

SP500 moved above the 4500 level as traders reacted to PPI reports. PPI increased by 0.1% month-over-month in June, compared to analyst consensus of +0.2%. Core PPI has also increased by 0.1%. The reports showed that inflation was slowing down, which served as a bullish catalyst for stocks. Today, traders also had a chance to take a look at the Initial Jobless Claims data. The report indicated that 237,000 Americans filed for unemployment benefits in a week, compared to analyst consensus of 250,000.

Taking a look at the daily chart, SP500 is heading towards the resistance in the 4575 – 4600 range. RSI has just entered into the overbought territory, but there is enough room to gain additional upside momentum in case the right catalysts emerge.

NASDAQ

NASDAQ has also tested new highs as traders focused on the pullback in Treasury yields. Alphabet, which is up by more than 4%, is among the biggest gainers in the NASDAQ index today. The stock gained strong upside momentum after Google unveiled new features of its Bard AI chatbot.

NASDAQ is also overbought, which is normal for a strong trend. RSI stays below the recent highs that were reached back in June, so the index has a decent chance to move higher without a material pullback.

Dow Jones

Dow Jones remains stuck below the 34,500 level despite the broad rally in the equity markets. The index is underperforming as demand is concentrated in tech stocks, which is bullish for the tech-heavy NASDAQ.

The resistance in the 34,500 – 34,600 area has proved its strength, so Dow Jones will need additional catalysts to settle above the 34,600 level. If Dow Jones stays below 34,500, it will likely move towards the support at 34,200 – 34,250.

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