SP500 Moves Away From Session Lows As Traders Focus On Falling Treasury Yields
SP500 rebounds from session lows as traders buy the dip which was triggered by the pullback in the AI sector.
CoreWeave, which is an AI cloud-computing provider, faced significant pressure as its bonds signaled severe distress. NVIDIA said that CoreWeave’s financial position was strong and the company did not need additional support.
CoreWeave’s troubles raised concerns about the true situation in the AI industry. However, speculative traders used the pullback to buy AI assets at attractive price levels.
Today, traders also focused on the Producer Prices report. PPI increased by +1.3% month-over-month in September, compared to analyst forecast of +0.5%. Core PPI increased by +0.7%, compared to analyst consensus of +0.3%. The report showed that inflationary pressure was rising.
Interestingly, Treasury yields pulled back as traders have started to buy bonds amid pullback in the AI sector. The yield of 2-year Treasuries declined towards the 4.75% level, while the yield of 10-year Treasuries pulled back towards the 5.08% level. According to FedWatch Tool, the probability of a rate hike at the meeting in October declined to 29.3% despite recent inflation data. Traders believe that Fed would not raise rates ahead of midterm elections.
Traders also had a chance to take a look at the Retail Sales report for September. The report indicated that Retail Sales increased by +0.8% month-over-month, compared to analyst forecast of +0.3%. Retail Sales Ex Autos grew by +0.9%, while analysts expected that they would increase by +0.5%. The encouraging Retail Sales report highlighted the strength of the U.S. economy.
Initial Jobless Claims report indicated that 199,000 Americans filed for unemployment benefits in a week, compared to analyst forecast of 200,000. The report showed the the job market remained in decent shape.
Healthcare stocks were among the biggest gainers in the SP500 index today. Basic materials stocks have also gained upside momentum as traders focused on the rebound in precious metals markets.
In case SP500 stays above the resistance level at 7720 – 7730, it will head towards the 50 MA at 7792. A move above the 50 MA will open the way to the test of the resistance level at 7815 – 7825.
NASDAQ Rebounds As Traders Ignore CoreWeave’s Problems
NASDAQ moved away from session lows as traders bought the dip. Memory stocks were among the biggest losers in the NASDAQ index today.
NASDAQ climbed above the support at 29,700 – 29,750 and is moving towards the 30,000 level. In case NASDAQ settles above 30,000, it will head towards the resistance level, which is located in the 30,200 – 30,250 range.
Dow Jones Price Forecast
Every new Dow Jones analysis as it publishes, today's technical signal and key levels, live price — on one page.
See all Dow Jones forecastsDow Jones Rallies As Traders Buy Healthcare Stocks
Dow Jones gained ground amid strong demand for consumer and healthcare stocks. Nike, which was up by +5.5%, was the biggest gainer in the Dow Jones index today. The rally was broad, and most stocks in the index moved higher in today’s trading session.
The nearest resistance level for Dow Jones is located in the 52,300 – 52,400 range. A successful test of this level will open the way to the test of the next resistance at 53,000 – 53,100. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.
For a look at all of today’s economic events, check out our economic calendar.
