NASDAQ Index, SP500, Dow Jones Analysis – Stocks Rally As Default Concerns Ease

Key Insights

• SP500 managed to break out of the 4115 – 4150 range. 
• NASDAQ moved to new highs amid rising appetite for risk. 
• Dow Jones rebounded towards the 33,400 level. 

SP500

SP500 moved out of the recent trading range as traders reacted to the comments from U.S. President Joe Biden, who said that U.S. will not default on its debts. At this point, Democrats and Republicans have not reached a consensus deal, but traders hope that the deal will be finalized before June 1. Today, traders also had a chance to take a look at the latest housing data, which showed that Bulding Permits declined while Housing Starts grew in April. These reports did not have a big impact on market dynamics as traders were mostly focused on debt ceiling negotiations, which will remain the key catalyst for markets in the upcoming days.

In case SP500 moves above the resistance at 4175, it will head towards the next resistance level at 4200. A successful test of this level will push SP500 towards the resistance at 4250. An additional resistance level may emerge in the 4200 – 4250 range, but traders should note that the previous moves inside this range were fast.

R1:4175 – R2:4200 – R3:4250

S1:4150 – S2:4115 – S3:4090

NASDAQ

NASDAQ tested new highs despite rising Treasury yields as demand for tech stocks remained strong. The appetite for risk is growing, and traders continue to bet on AI-related stocks.

In case NASDAQ manages to settle above the resistance at 13,700, it will head towards the next resistance level at 13,900. A move above this level will push NASDAQ towards the resistance at 14,100.

R1:13,700 – R2:13,900 – R3:14,100

S1:13,550 – S2:13,400 – S3:13,250

Dow Jones

Dow Jones rebounds amid a broad rally in the equity markets. The rebound is broad, and the majority of Dow Jones components are moving higher in today’s trading session.

In case Dow Jones manages to settle above the 33,500 level, it will head towards the next resistance at 33,800. A move above 33,800 will push Dow Jones towards the 34,000 level.

R1:33,500 – R2:33,800 – R3:34,000

S1:33,300 – S2:33,175 – S3:33,000

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