NASDAQ Index, SP500, Dow Jones Forecasts – Major Indices Test Session Lows

Key Insights

• SP500 tests support in the 4335 – 4350 range. 
• NASDAQ moved towards session lows as traders cut their risks ahead of the weekend. 
• Dow Jones is trying to settle below the 34,000 level.

SP500

SP500 settled near the recent lows as traders reacted to the PMI reports. Manufacturing PMI increased from 47.9 in August to 48.9 in September but remained in the contraction territory. Services PMI declined from 50.5 to 50.2 but managed to stay above the key 50 level. The reports were somewhat disappointing as the activity in the services sector is declining, which will have a negative impact on the economy. However, these reports did not provide sufficient support to major indices. Traders believe that PMI data should not have a material impact on Fed’s decision making, and the Fed will stay focused on its fight against inflation. Treasury yields were moving lower today, but this move did not provide support to stocks.

Currently, SP500 is trying to settle below the support at 4335 – 4350. In case this attempt is successful, SP500 will head towards the next support level, which is located in the 4260 – 4280 range.

NASDAQ

NASDAQ lost momentum and pulled back towards the recent lows. Traders worry that Fed will put too much pressure on the economy.

NASDAQ needs to stay above the important support at 14,560 – 14,680 to have a chance to gain upside momentum next week. RSI is close to the oversold territory, which may ultimately provide some support to NASDAQ.

Dow Jones

Dow Jones remains under pressure as traders reduce their risks ahead of the weekend. Rate hike worries serve as the key negative catalyst for Dow Jones. The pullback is broad, and most Dow Jones components are moving lower.

If Dow Jones settles below the 34,000 level, it will head towards the next support, which is located in the 33,600 – 33,700 range.

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