NASDAQ Index, SP500, Dow Jones Analysis – Stocks Retreat Amid Recession Worries

Key Insights

• SP500 is trying to settle below the 4335 – 4350 support level. 
• NASDAQ is down by 1% as traders reduce risks amid recession worries. 
• Dow Jones remains under significant pressure. 

SP500

SP500 is currently trying to settle below the support in the 4335 – 4350 range as traders focus on recession risks. Today’s PMI reports showed that the U.S. manufacturing sector remained under significant pressure. The data from other developed countries was also disappointing and pointed to a potential recession. Meanwhile, the Fed plans at least one rate hike to deal with high inflation, which will put additional pressure on the economy. Today’s pullback is broad, and all market segments are moving lower, which highlights the risk-off sentiment.

In case SP500 manages to settle below the support in the 4335 – 4350 range, it will head towards the next support level in the 4290 – 4305 range. Traders should note that SP500 has recently managed to settle below the 50 MA, so it has a decent chance to get below the 4335 level as the pullback continues.

NASDAQ

NASDAQ is also under strong pressure today. Traders continue to take profits after the multi-week rally. Falling Treasury yields do not provide support to the yield-sensitive tech stocks as lower yields reflect rising demand for safe-haven assets.

NASDAQ’s recent upside move was fast, so the current pullback has not pushed it towards the material support level in the 14,550 – 14,680 range. RSI remains in the moderate territory, and there is plenty of room to gain additional downside momentum in the upcoming trading sessions.

Dow Jones

Dow Jones is currently trying to settle below the support level in the 33,785 – 33,875 range amid a broad pullback in the equity markets.

The index continues to move lower at a measured pace, and RSI has not yet reached the oversold territory. A successful test of the current support level will open the way to the test of the next support in the 33,400 – 33,450 range.

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