NASDAQ Index, SP500, Dow Jones Forecasts – NASDAQ Gains Ground As Oil Prices Drop

SP500 Rebounds Despite Worries About Hawkish Fed

SP500 gains ground as traders focus on the strong pullback in the oil markets and react to CPI data.

Inflation Rate remained unchanged at 3.4% in August, in line with analyst consensus. Core Inflation Rate decreased from 2.5% to 2.4%. On a month-over-month basis, Core Inflation Rate grew by +0.3%, while analysts expected that it would increase by +0.2%. Interestingly, this report did not put pressure on stocks.

That said, the probability of a rate hike at the meeting next week increased. According to FedWatch Tool, there is a 86.7% chance of a rate hike. The yield of 2-year Treasuries moved above the 4.64% level as bond traders prepared for hawkish Fed. The yield of 10-year Treasuries made an attempt to settle above the psychologically important 5.00% level, but stock traders have mostly ignored this move.

Stock traders focused on the sell-off in the oil markets, which was triggered by reports indicating Gulf states prepared to negotiate with Iran. The negotiating position of Iran became stronger after Houthis took control of a key port on Red Sea. I’d note that U.S. has not shown any desire to negotiate with Iran, so the market’s reaction may be too optimistic.

Tech stocks were among the biggest gainers today, which indicates that the appetite for risk increased. Not surprisingly, energy stocks found themselves under pressure amid strong pullback in the oil markets.

Currently, SP500 is trying to settle above the 50 MA at 7680. In case this attempt is successful, SP500 will move towards the next resistance level, which is located in the 7720 – 7730 range.

On the support side, a move below the 7650 level will open the way to the test of the nearest support at 7615 – 7625.

NASDAQ Gains Ground As Traders Focus On Falling Oil Prices

NASDAQ moved higher amid rising demand for tech stocks. Cisco, which was up by +4%, was among the biggest gainers in the NASDAQ index today.

NASDAQ climbed above the 50 MA at 29,379 and made an attempt to settle above the resistance level at 29,450 – 29,500. If NASDAQ manages to settle above the 29,500 level, it will head towards the next resistance level, which is located in the 29,750 – 29,800 range. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.

Dow Jones Moves Higher As Traders Shrug Off Consumer Sentiment Data

Dow Jones  gains ground amid broad rally in the equity markets, which is driven by the pullback in the oil markets.

The disappointing Michigan Consumer Sentiment report, which indicated that Consumer Sentiment declined from 51.7 in August to 47.8 in September, did not put pressure on the Dow Jones index today.

The report showed that year-ahead inflation expectations increased from 4.0% to 4.6%, but traders ignored rising inflation expectations and focused on falling oil prices.

The nearest resistance level for Dow Jones is located in the 52,800 – 52,900 range. If Dow Jones climbs above the 52,900 level, it will head towards the next resistance at 53,600 – 53,700.

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