NASDAQ Index, SP500, Dow Jones Forecasts – NASDAQ Rallies As Inflation Rate Drops

SP500 Attempts To Settle Above 7550

SP500 gains ground as traders react to CPI report. The report indicated that Inflation Rate decreased from 4.2% in May to 3.5% in June, compared to analyst forecast of 3.8%. Core Inflation Rate decreased from 2.9% to 2.6%, while analysts expected that it would decline to 2.8%.

The surprising CPI report provided material support to SP500 as traders bet on less hawkish Fed. Treasury yields moved lower after the release of CPI data, providing additional support to stocks. The yield of 2-year Treasuries pulled back towards the 4.20% level, while the yield of 10-year Treasuries settled below 4.60%.

Traders also remained focused on developments in the Middle East and the situation in the oil markets. WTI oil climbed above the $79.00 level as U.S. and Iran traded strikes. President Trump cancelled the 20% fee for safe passage through the Strait of Hormuz, which he announced yesterday. Trump said that he made this decision after talking to Gulf states. Instead of the fee, Gulf states would invest in the U.S. At this point, stock traders are not worried that rising oil prices will force the Fed to be more hawkish.

Tech stocks were among the biggest gainers in the SP500 index today. Basic materials stocks gained strong upside momentum, supported by inflation data. Healthcare and consumer defensive stocks were among the losers as demand for safe-haven assets declined.

SP500 settled above the 50 MA at 7524 and is trying to settle above the resistance level at 7540 – 7550. In case this attempt is successful, SP500 will move towards the next resistance, which is located in the 7615 – 7625 range. RSI remains in the moderate territory, so there is plenty of room to gain additional upside momentum in case the right catalysts emerge.

NASDAQ Gains Ground As Traders Rush To Buy Tech Stocks After CPI Data

NASDAQ rallied as falling Treasury yields raised demand for tech stocks. Strategy, which was up by +5.7%, was among the biggest gainers in the NASDAQ index today. The stock rallied as Bitcoin climbed above the $64,000 level.

The nearest resistance level for NASDAQ is located in the 29,800 – 29,850 range. In case NASDAQ manages to settle above the 29,850 level, it will head towards the next resistance at 30,250 – 30,300.

On the support side, a move below the 50 MA at 29,501 will push NASDAQ towards the support at 29,350 – 29,400.

Dow Jones Is Flat As IBM Collapses 24%

Dow Jones was mostly flat due to the strong sell-off in IBM stock. IBM shares were down by -24% after the company’s revenue missed analyst estimates. The sell-off was the biggest one in 58 years.

Goldman Sachs gained 8% as the company posted record revenue and earnings, easily beating analyst estimates.

In case Dow Jones settles above the 52,500 level, it will head towards the nearest resistance at 52,700 – 52,800. A successful test of the resistance at 52,700 – 52,800 will push Dow Jones towards the next resistance at 53,300 – 53,400.

On the support side, Dow Jones needs to settle below the support level at 52,100 – 52,200 to gain additional downside momentum in the near term.

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