NASDAQ Index, SP500, Dow Jones Forecasts – Major Indices Decline After S&P Dowgrades Banks

Key Insights

• SP500 is losing ground as traders respond to bank rating cuts by S&P Global. 
• NASDAQ is mostly flat as investors prepare for the key earnings report from NVIDIA, which will be released tomorrow. 
• Dow Jones is moving lower as financial stocks slide. 

SP500

SP500 is losing ground as traders react to S&P Global decision to cut ratings of banks with high commercial real estate exposure. Analysts have previously warned that rising interest rates put significant pressure on the commercial real estate, so the rating agency’s decision was not surprising. However, this decision triggered a material pullback in Financial stocks, which were among the worst performers in the SP500 index today. Energy stocks have also found themselves under pressure as oil and natural gas markets moved lower. The weaker-than-expected Existing Home Sales report, which showed that Existing Home Sales declined by 2.2% month-over-month in July, served as an additional negative catalyst for SP500.

From the technical point of view, SP500 faced resistance near 4430 and moved below the 4400 level. In case SP500 manages to settle below 4400, it will head towards the support level at 4335 – 4350.

NASDAQ

NASDAQ is mostly flat as traders wait for NVIDIA’s results, which will be released tomorrow after the market close. The company’s earnings report will have a significant impact on NASDAQ dynamics this week.

In case NASDAQ settles below the 50 MA at 14,955, it will head towards the nearest support level, which is located at the recent lows at 14,560 – 14,680.

Dow Jones

Dow Jones remains under pressure. The pullback is led by Financial stocks, including JPMorgan Chase, American Express, and Goldman Sachs. Today’s pullback is broad, and the majority of the Dow Jones components are moving lower.

Dow Jones has recently managed to settle below the previous support at 34,500 – 34,600 and is moving towards the next support at 33,600 – 33,700. RSI remains in the moderate territory, so there is plenty of room to gain additional downside momentum.

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