NASDAQ Index, SP500, Dow Jones Forecasts – NASDAQ Dives 2% As WTI Oil Tests The $100 Level

SP500 Retreats As Traders Bet On A Long War In The Middle East

SP500 remains under strong pressure as traders focus on the rally in the oil markets. WTI oil moved towards the $100 level as traders reacted to the escalation in the Middle East and worried about a potential ground operation in Iran.

The market does not believe that U.S. and Iran will be able to reach a deal in the near term. The risks of additional damage for oil and gas assets in the region is rising on a daily basis. High oil prices may force the Fed to raise rates to fight inflation.

Today, traders also focused on the final reading of Michigan Consumer Sentiment report. The report indicated that Consumer Sentiment decreased from 56.6 in February to 53.3 in March, compared to analyst consensus of 54.

The report showed that high oil prices have already put pressure on Consumer Sentiment. However,  the report also indicated that consumers “may not expect recent negative developments to persist far into the future”. If the war in the Middle East drags on, consumer sentiment will likely drop further.

Year-ahead inflation expectations increased from 3.4% in February to 3.8% in March as consumers focused on rising gas prices. Long-run inflation expectations pulled back towards 3.2%.

Most market sectors moved lower in today’s trading session. The pullback was led by consumer cyclical and financial stocks.

Energy stocks gained ground as traders reacted to the strong rally in the oil markets. Basic materials stocks moved higher as precious metals markets rallied.

Interestingly, consumer defensive and utilities stocks have also managed to gain some ground amid rising demand for safe-haven assets.

The nearest support level for SP500 is located in the 6350 – 6360 range. If SP500 declines below the 6350 level, it will head towards the next support at 6290 – 6300. It should be noted that RSI is in the oversold territory, so the risks of a rebound are increasing.

NASDAQ Tests Support At 23,250 – 23,300

NASDAQ suffered a sell-off as traders continued to sell tech stocks amid falling appetite for risk. Software stocks were among the biggest losers in the NASDAQ index today.

Meta’s pullback continued as traders remained focused on the recent court ruling and worried about potential lawsuits against the company.

Currently, NASDAQ is trying to settle below the support level at 23,250 – 23,300. In case this attempt is successful, NASDAQ will head towards the next support at 22,900 – 22,950.

On the upside, NASDAQ needs to settle back above the 23,300 level to have a chance to gain sustainable upside momentum in the near term. In this case, NASDAQ will head towards the resistance at 23,600 – 23,650.

Dow Jones Tests New Lows

Dow Jones is losing ground amid broad pullback in the equity markets. Amazon, which is down by 3.8%, is the biggest loser in the Dow Jones index today.

A successful test of the support level at 45,200 – 45,300 will open the way to the test of the next support, which is located in the 44,600 – 44,700 range. RSI remains in the moderate territory, so there is plenty of room to gain additional downside momentum in case the right catalysts emerge.

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