NASDAQ Index, SP500, Dow Jones Forecasts – NASDAQ Pulls Back As Western Digital Dives 13%

SP500 Attempts To Settle Back Below 7370

SP500 is mostly flat as traders react to Michigan Consumer Sentiment report and focus on the strong pullback in the oil markets.

Michigan Consumer Sentiment increased from 44.8 in May to 49.5 in June, compared to analyst forecast of 50. Current Economic Conditions improved from 45.8 to 47.7, while Index of Consumer Expectations increased from 44.1 to 50.7.

According to the report, “consumers’ worries over long-term consequences of the Iran conflict appear to be easing.”

Year-ahead inflation expectations pulled back from 4.8% in May to 4.6% in June. Before the war in the Middle East began, year-ahead inflation expectations were at 3.4%. Elevated inflation expectations present a problem for the Fed, which is worried that they could become anchored. That said, long-run inflation expectations decreased from 3.9% to 3.3%, which was a welcome development for SP500 bulls.

WTI oil pulled back towards the $69.00 level as traders ignored Iran’s attack on a container ship that was going through the Strait of Hormuz. President Trump said that the attack violated the ceasefire agreement, but traders expect that the incident would not escalate the situation in the Middle East. According to recent reports, the next round of U.S. – Iran talks is scheduled for June 28-29.

Treasury yields pulled back as bond traders reacted to the pullback in the oil markets. The yield of 2-year Treasuries declined below the 4.09% level, while the yield of 10-year Treasuries settled near 4.37%. Falling Treasury yields provided some support to SP500 in today’s trading session.

Healthcare and consumer cyclical stocks were among the biggest gainers today. Energy stocks found themselves under pressure as traders reacted to the dynamics of oil markets. Tech stocks have also moved lower as traders remained worried about high valuation of tech leaders.

Currently, SP500 is trying to settle back below the support at 7370 – 7380. In case this attempt is successful, SP500 will move towards the next support level, which is located in the 7290 – 7300 range.

NASDAQ Retreats As Traders Focus On Memory Costs

NASDAQ is losing some ground as traders sell tech stocks. Western Digital, which is down by 13%, is the biggest loser in the NASDAQ index today. Worries about memory costs have also put significant pressure on Seagate and Sandisk.

NASDAQ failed to settle above the resistance level at 29,350 – 29,400 and pulled back towards the 29,200 level. In case NASDAQ settles below 29,200, it will head towards the nearest support, which is located in the 28,800 – 28,900 range. RSI is in the moderate territory, so there is plenty of room to gain momentum in the near term.

Dow Jones Stays Range-Bound

Dow Jones remains stuck in a range between the support at 51,600 – 51,700 and the resistance at 52,100 – 52,200 as traders wait for additional catalysts.

A successful test of the support at 51,600 – 51,700 will open the way to the test of the next support level at 51,000 – 51,100.

On the upside, a move above the 52,200 level will open the way to the test of recent highs near the 52,700 level.

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