NASDAQ Index, SP500, Dow Jones Forecasts – NASDAQ Falls 0.9% As Powell Stays Hawkish

Key Insights

• SP500 retreats as Powell signals that another rate hike is possible. 
• NASDAQ pulls back towards the 15,000 level. 
• Dow Jones managed to stay above the 34,500 level as demand for defensive sectors increased. 

SP500

SP500 pulled back as traders reacted to Fed Interest Rate Decision and the subsequent comments from Fed Chair Jerome Powell. Fed left the interest rate unchanged and adjusted its economic projections. Fed continues to expect that it will raise rates one more time this year. The projections for the federal funds rate in 2024 were changed from 4.6% to 5.1%. Powell’s comments during the press conference were rather hawkish. He noted that a pause in rate hikes did not mean that Fed has stopped completely. Powell wants to make sure that federal funds rate has reached the sufficiently restrictive level. All in all, Powell was more hawkish than expected, so SP500 found itself under pressure.

Currently, SP500 is trying to settle below the support at 4430 – 4450. If this attempt is successful, SP500 will move towards the next support in the 4335 – 4350 range.

NASDAQ

NASDAQ retreats as traders react to Fed decision. Powell noted that Fed may have to do more if the economy is stronger than expected. Fed policy outlook is the key driver for markets, so traders rush out of tech stocks if they fear that Fed will keep rates at high levels for many months.

NASDAQ has already settled below the previous support at 15,200 – 15,300. If NASDAQ declines below the 15,000 level, it will move towards the next support, which is located in the 14,560 – 14,680 range.

Dow Jones

Dow Jones remains in the positive territory despite hawkish Fed. The solid performance of healthcare and consumer defensive stocks provides support to the Dow Jones index.

If Dow Jones settles back below 34,500, it will head towards the support at 33,600 – 33,700.

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