NASDAQ Index, SP500, Dow Jones Forecasts – NASDAQ Rebounds Despite Fed’s Hike

SP500 Rebounds As Traders Ignore Fed’s Rate Hike

SP500 gains ground as traders shrug off worries about hawkish Fed and focus on the pullback in Treasury yields.

Treasury yields moved lower as bond markets calmed down after hawkish comments from Fed Chair Warsh. Fed showed that it was ready to fight inflation, which was good for bonds. The yield of 2-year Treasuries declined towards the 4.67% level, while the yield of 10-year Treasuries moved towards the 4.93% level. Falling Treasury yields provided material support to SP500 in today’s trading session.

Traders also focused on housing market data. Building Permits decreased by -2.7% month-over-month in August, compared to analyst forecast of -1.6%. Housing Starts declined by -2.6%, while analysts expected that they would increase by +9.0%. Pending Home Sales decreased by -4.7%, compared to analyst consensus of -0.7%. The reports indicated that high interest rates put material pressure on the housing market.

Traders also had a chance to take a look at the Initial Jobless Claims report. The report showed that 196,000 Americans filed for unemployment benefits in a week, compared to analyst forecast of 206,000. The job market remains in good shape, providing Fed with an opportunity to focus on fighting inflation.

Tech stocks were among the biggest gainers in the SP500 index today. Basic materials stocks have also managed to gain strong momentum as traders focused on the rally in precious metals markets. Consumer defensive stocks pulled back as demand for safe-haven assets declined.

SP500 moved above the resistance level at 7615 – 7625 and is trying to settle above the 50 MA at 7643. In case this attempt is successful, SP500 will move towards the next resistance level, which is located in the 7720 – 7730 range.

NASDAQ Rallies As Traders Buy The Dip

NASDAQ rallied as traders used the recent pullback as an opportunity to buy tech stocks. Intel, which gained +8.7%, was the biggest gainer in the NASDAQ index today.

Currently, NASDAQ is trying to settle above the resistance level at 29,450 – 29,500. In case this attempt is successful, NASDAQ will move towards the next resistance at 29,850 – 29,900. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.

Dow Jones Tested The 52,000 Level

Dow Jones has also moved higher amid broad rally in the equity markets. NVIDIA, which was up by +2.7%, was the best performer in the Dow Jones index today. The stock gained strong upside momentum amid rising demand for AI-related stocks. Traders shrug off worries about high interest rates and focus on the potential of the new technology. The company’s CEO has recently said that chip sales would double over the next year, up from the prior growth outlook of +70%.

In case case Dow Jones settles above the 51,900 level, it will head towards the resistance level at 52,200 – 52,300. On the support side, a successful test of the support at 51,600 – 51,700 will open the way to the test of the next support level at 50,700 – 50,800.

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