SP500 Moves Higher Amid Falling Oil Prices
SP500 gains ground as traders focus on the pullback in the oil markets and react to the better-than-expected Michigan Consumer Sentiment report.
The report indicated that Michigan Consumer Sentiment decreased from 51.7 in August to 48.1 in September, compared to analyst forecast of 47.6.
Current Economic Conditions declined from 51.9 to 50.9, while Index of Consumer Expectations pulled back from 51.5 to 46.3.
Year-ahead inflation expectations increased from 4.0% in August to 4.6%. Long-run inflation expectations grew from 3.3% to 3.4%.
Today, traders also had a chance to take a look at the Durable Goods Orders report for August. The report showed that Durable Goods Orders were unchanged on a month-over-month basis, compared to analyst forecast of -0.4%. Durable Goods Orders Ex Transp increased by +0.3% month-over-month, compared to analyst consensus of +0.6%.
Oil prices pulled back by -2.7% amid reports indicating that U.S. and Iran were working on a phased deal to reopen the Strait of Hormuz. It remains to be seen whether current negotiations will be successful as previous attempts to craft a deal failed. The hawkish position of Iran’s Revolutionary Guard Corps, whose power has increased significantly during the war, serves as the key obstacle on the way to any kind of a deal between U.S. and Iran.
The yield of 2-year Treasuries pulled back towards the 4.86% level as bond traders focused on the pullback in the oil markets. However, the yield of 30-year Treasuries tested new highs above 5.50%, raising worries about continuation of the sell-off in bond markets.
Tech stocks were among the biggest gainers today as traders’ appetite for risk increased. Energy stocks found themselves under pressure amid pullback in the oil markets.
Currently, SP500 is trying to settle above the resistance level at 7720 – 7730. In case SP500 manages to settle above the 7730 level, it will head towards the 7780 level. A move above 7780 will open the way to the test of the resistance at 7815 – 7825.
NASDAQ Gains Ground As Traders Buy Chip Stocks
NASDAQ moved higher amid rising demand for chip stocks. Microchip Technology, which was up by +5%, was the biggest gainer in the NASDAQ index today.
The nearest resistance level for NASDAQ is located in the 30,750 – 30,800 range. If NASDAQ manages to settle above the 30,800 level, it will head towards the 31,000 level. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.
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See all Dow Jones forecastsDow Jones Tests Resistance At 51,600 – 51,700
Dow Jones has also moved higher, supported by strong demand for industrials and healthcare stocks. The pullback in the oil markets provided material support to the Dow Jones index today.
From the technical point of view, Dow Jones attempts to settle above the resistance level at 51,600 – 51,700. If Dow Jones manages to settle above the 51,700 level, it will head towards the next resistance, which is located in the 52,200 – 52,300 range.
On the support side, a move below the 51,500 level will open the way to the test of the support level at 51,100 – 51,200.
For a look at all of today’s economic events, check out our economic calendar.
