NASDAQ Index, SP500, Dow Jones Forecasts – NASDAQ Rallies As Micron Gains 5.3%

SP500 Tests New Highs Despite Inflation Fears

SP500 tests new highs as traders ignore Producer Prices data and focus on the strong performance of tech stocks.

PPI increased by +1.4% month-over-month in April, compared to analyst forecast of +0.5%. Core PPI grew by +1%, while analysts expected that it would increase by +0.3%. The report showed that high energy prices have already forced producers to raise prices. In case oil prices stay near current levels, inflation will move higher.

Treasury yields gained ground as bond traders reacted to the Producer Prices report and bet on hawkish Fed. The yield of 10-year Treasuries climbed above the 4.47% level, while the yield of 30-year Treasuries settled near the 5.04% level. It should be noted that rising Treasury yields did not put pressure on SP500 as market sentiment remained extremely bullish.

Oil prices pulled back as U.S. President Trump arrived in China to meet with Xi. WTI oil declined towards the $101.00 level, while Brent oil settled below $106.00. Falling oil prices provided some support to stocks in today’s trading session.

Tech stocks were among the biggest gainers today. Consumer cyclical and healthcare stocks have also moved higher. Utilities and real estate stocks declined as traders reacted to rising Treasury yields. Energy stocks have also moved lower amid pullback in the oil markets.

SP500 climbed above the resistance at 7425 – 7435 and is trying to settle above the 7450 level. In case this attempt is successful, SP500 will head towards the 7500 level. RSI remains in the moderate territory, so there is plenty of room to gain momentum in the near term.

NASDAQ Rallies As Traders Buy AI-Related Stocks

NASDAQ rallied amid strong demand for tech stocks. Micron, which was up by 5.3%, was among the biggest gainers in the NASDAQ index today. The stock gained strong momentum as the company’s CEO Sanjay Mehrotra joined President Trump in his trip to China.

From a big picture point of view, traders bet that AI-related demand will continue to grow at a robust pace, and Micron is set to profit from this trend. The company’s market capitalization is on the way to the $1 trillion level.

From the technical point of view, NASDAQ managed to settle above the resistance at 29,200 – 29,250 and is moving towards the 29,500 level. In case NASDAQ climbs above 29,500, it will head towards the psychologically important 30,000 level.

Dow Jones Is Stuck Below The 49,800 Level

Dow Jones continues its attempts to settle above the resistance at 49,700 – 49,800. Traders are mostly focused on tech stocks, which is bearish for Dow Jones.

Salesforce, which is down by 2.8%, is the worst performer in the Dow Jones index today. The stock remains under pressure as traders worry that AI will hurt the business of software companies.

The resistance at 49,700 – 49,800 has been tested many times and proved its strength. In case Dow Jones manages to settle above this level, it will quickly get to the test of the 50,000 level. A move above 50,000 will open the way to the test of the next resistance, which is located in the 50,400 – 50,500 range.

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