NASDAQ Index, SP500, Dow Jones Forecasts – NASDAQ Rallies As Alphabet Soars 9%

SP500 Tests Historic Highs

SP500 tests historic highs as traders react to GDP Growth Rate report and focus on Big Tech earnings.

GDP Growth Rate was +2.0% in the first quarter, compared to analyst consensus of +2.3%. The report missed analyst estimates but traders interpreted it as a sign of strength of the U.S. economy, which managed to grow at a decent pace despite rising energy prices. Higher demand for AI boosted economic growth.

Initial Jobless Claims report indicated that 189,000 Americans filed for unemployment benefits in a week, compared to analyst consensus of 215,000. The report showed that the job market remained in decent shape and provided additional support to SP500.

PCE Price index increased from 2.8% in February to 3.5% in March due to rising oil prices. Core PCE Price index grew by +0.3% month-over-month in March, in line with analyst estimates.

Personal Income increased by +0.6% in March, exceeding the analyst consensus of +0.3%. Personal Spending grew by +0.9%, in line with analyst forecast.

Today’s rally was broad, and most market sectors gained ground in today’s trading session. The strong performance of Alphabet, which gained 9% after the encouraging earnings report, provided significant support to SP500.

From the technical point of view, SP500 climbed above the resistance at 7170 – 7180 and is heading towards the 7250 level. If SP500 manages to settle above 7250, it will gain additional upside momentum and move towards the 7300 level. RSI remains in the moderate territory, so there is plenty of room to gain momentum in the near term.

NASDAQ Tests Resistance At 27,350 – 27,400

NASDAQ is moving higher as traders react to Big Tech earnings reports. The sell-off in Meta stock, which is down by 8%, did not put pressure on the NASDAQ index today.

Meta shares pulled back as the company raised its spending outlook for the year. Traders are worried that Meta’s AI investments would put significant pressure on the company’s bottom line.

NASDAQ continues its attempts to settle above the resistance level at 27,350 – 27,400. If NASDAQ settles above the 27,400 level, it will head towards the 28,000 level. On the support side, a move below the 27,200 level will push NASDAQ towards the support at 26,950 – 27,000.

Dow Jones Rallies As Caterpillar Gains 10%

Dow Jones gained strong momentum, supported by the rally in Caterpillar shares. Caterpillar is up by 10% as the company’s first-quarter results beat analyst expectations.

Demand for power, which is driven by AI demand, boosted Caterpillar’s revenue, which grew by 22%. Power-generation sales increased by as much as 48% amid strong demand from data centers. As tech companies continue to boost spending on AI, Caterpillar’s business may continue to grow at a robust pace.

Dow Jones settled above the previous resistance at 49,000 – 49,100 and is trying to settle above the next resistance level at 49,700 – 49,800. In case this attempt is successful, Dow Jones will move towards historic highs near the 50,500 level. RSI is close to overbought territory, but there is enough room to gain additional momentum in case the right catalysts emerge.

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