NASDAQ Index, SP500, Dow Jones Forecasts – Dow Jones Retreats As Goldman Sachs Dives 7.8%

SP500 Moves Lower As PPI Exceeds Analyst Estimates

SP500 is losing ground as traders react to the higher-than-expected Producer Prices data. PPI increased by +0.5% month-over-month in January, compared to analyst consensus of +0.3%.

Core PPI grew by +0.8% on a month-over-month basis, while analysts expected that it would increase by +0.3%. Higher-than-expected PPI may force the Fed to be more hawkish, which is bearish for stocks.

Interestingly, Treasury yields moved lower in today’s trading session. The yield of 2-year Treasuries declined below the 3.40% level, while the yield of 10-year Treasuries pulled back towards 3.96%. Most likely, Treasuries benefited from rising demand for safe-haven assets amid pullback in equity markets.

Today, traders also had a chance to take a look at the Chicago PMI report for February. Chicago PMI increased from 54.0 in January to 57.7 in February, compared to analyst forecast of 52.8.

Energy stocks were among the biggest gainers today as traders focused on the strong rally in the oil markets. Oil prices are moving higher as traders worry that U.S. may deliver strikes against Iran over the weekend. In this scenario, energy stocks will enjoy strong support.

Consumer defensive and healthcare stocks have also moved higher amid rising demand for safe-haven assets. Financial and tech stocks were among the biggest losers in the SP500 index today.

Currently, SP500 is trying to settle below the support at 6870 – 6880. In case this attempt is successful, SP500 will head towards the next support level, which is located in the 6780 – 6880 range.

NASDAQ Retreats As Traders Sell Software Stocks

NASDAQ pulled back amid sell-off in the software sector. The “usual suspects” like Shopify, Datadog, and Workday were among the biggest losers in the NASDAQ index today. Traders remain worried that AI will decimate the business of such companies.

NVIDIA was down by 3.5% as pullback continued. NVIDIA’s weakness is a significant bearish signal for the market as the stock continues to fall after the release of a strong earnings report.

NASDAQ is trying to settle below the 50 MA at 24,929. If NASDAQ manages to settle below the 50 MA, it will move towards the nearest support level at 24,700 – 24,750. A successful test of the support at 24,700 – 24,750 will open the way to the test of the next support at 24,200 – 24,250.

Dow Jones Dives Amid Sell-Off In Financial Stocks

Dow Jones gained strong downside momentum amid broad pullback in the equity markets. The major sell-off in financial stocks served as the key catalyst for Dow Jones today.

Goldman Sachs is down by 7.8% as traders react to layoffs in Block. The company’s CEO Jack Dorsey said that new AI tools allowed the company to cut 40% of its workforce. American Express fell by 7.5%.

From a big picture point of view, traders are worried about the negative impact of AI on employment and, therefore, on the credit quality of financial companies’ customers. Traders are also worried that demand for financial services from traditional players would decline.

The recent Citrini report, which painted a dystopian picture of an economy which is a death spiral due to AI, quickly comes to mind when people look at Dorsey’s decision to fire as much as 40% of Block’s employees.

Dow Jones attempts to settle below the support at 48,700 – 48,800. In case this attempt is successful, Dow Jones will move towards the next support level, which is located in the 47,900 – 48,000 range.

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