NASDAQ Index, SP500, Dow Jones Forecasts – NASDAQ Gains Ground As Applovin Soars 14.5%

SP500 Tests New Highs As Traders Prepare For Economic Reports

SP500 gains ground as traders wait for economic reports. Tomorrow, traders will focus on the Retail Sales report, which is expected to show that Retail Sales increased by +0.5% month-over-month in December.

Analysts expect that Non Farm Payrolls report, which will be released on Wednesday, will indicate that U.S. economy added 70,000 jobs in January. Traders stay bullish and bet that reports will show that U.S. economy remains in decent shape.

Basic materials stocks are among the biggest gainers today as traders focus on the rally in precious metals markets. Gold climbed above the $5050 level, while silver tested the $83.00 level.

Energy stocks have also gained ground despite the strong pullback in natural gas markets. Oil prices are moving higher amid rising U.S. – Iran tensions, providing material support to oil-related stocks.

Consumer defensive and healthcare stocks moved lower as demand for safe-haven assets declined.

SP500 climbed above the resistance at 6940 – 6950 and is trying to settle above the 6980 level. In case this attempt is successful, SP500 will head towards the next resistance level, which is located in the 7010 – 7020 range.

NASDAQ Tests New Highs As Traders Buy AI-Related Stocks

NASDAQ gained strong upside momentum amid rising demand for tech stocks. Advanced Micro Devices and NVIDIA were among the biggest gainers today. Traders use recent pullbacks as an opportunity to increase their long positions in AI-related stocks at attractive levels.

Applovin, which gained 14.5%, was the best performer in the NASDAQ index today. The stock rallied as Jefferies noted that it was a great buying opportunity.

Software stocks have been hurt by worries about the negative impact of AI. Some analysts believe that AI tools will cut the market share of software-as-a-service companies.

However, it remains to be seen whether companies that have used such software and invested years to adopt these tools into their workflow will easily switch to other tools.

The key question is whether legacy software has staying power or not. In this environment, it’s not surprising to see that some traders are ready to bet that recent sell-off in software stocks presents a great buying opportunity.

Currently, NASDAQ is trying to settle above the resistance level at 25,200 – 25,250. if NASDAQ stays above the 25,250 level, it will get to the test of the 50 MA at 25,359. A move above the 50 MA will open the way to the test of the next resistance at 25,550 – 25,600.

Dow Jones Tests Resistance At 50,100 – 50,200

Dow Jones is mostly flat as demand for healthcare and consumer defensive stocks declined.

Merck and AMGEN are the worst performers in the Dow Jones index today. Walmart, which is down by 2%, was also among the biggest losers in the Dow Jones index today.

Microsoft, NVIDIA, and Cisco were the biggest gainers as demand for tech stocks increased. Traders shrugged off worries about high AI spending and focused on the high potential of the technology.

The technical picture remains bullish as Dow Jones continues its attempts to settle above the nearest resistance level, which is located in the 50,100 – 50,200 range. In case Dow Jones manages to settle above the 50,200 level, it will gain additional upside momentum and move towards the 50,500 level. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.

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