NASDAQ Index, SP500, Dow Jones Forecasts – NASDAQ Rebounds From Session Lows As NVIDIA Tests Historic Highs

Key Insights

• SP500 moved back towards the 4950 level as traders reacted to ISM Services PMI report. 
• NASDAQ rebounded from session lows, supported by the strong performance of NVIDIA stock. 
• Dow Jones pulled back as McDonald’s dived 3.8% after the disappointing quarterly report. 

SP500

SP500 managed to rebound from session lows as traders reacted to ISM Services PMI report. The report indicated that ISM Services PMI increased from 50.6 in December to 53.4 in January, compared to analyst consensus of 52. Treasury yields moved higher as traders bet on a more hawkish Fed after the release of the strong report. The yield of 2-year Treasuries settled near 4.45%, while the yield of 10-year Treasuries climbed above the 4.16% level. Higher Treasury yields put some pressure on SP500, but it looks that traders believe that strong economy will push stocks higher despite hawkish Fed. Healthcare and Tech stocks were among the leaders today, while the yield-sensitive Utilities and Real Estate stocks have found themselves under pressure.

General market sentiment remains extremely bullish, and the pullback was quickly bought. RSI is in the moderate territory, and there is plenty of room to gain additional upside momentum. A move above the 4960 level will open the way to the test of the psychologically important 5000 level.

NASDAQ

NASDAQ received support in the 17,450 – 17,500 range and rebounded towards the recent highs. NVIDIA tested historic highs as the strong rally continued. The stock gained upside momentum after Goldman Sachs raised the price target from $625 to $800.

Demand for AI-related stocks stays strong, which is bullish for NASDAQ. The index needs to settle above the 17,700 level to gain additional upside momentum.

Dow Jones

Dow Jones pulled back as the majority of the index components moved lower. The pullback was led by McDonald’s, which was down by 3.8% after the earnings report. The company’s sales were hit by the Israel – Hamas conflict as some customers ignored McDonald’s products for political reasons.

The nearest support level for Dow Jones is located in the 38,100 – 38,150 range. A move below 38,100 will push Dow Jones towards the support at 37,750 – 37,800.

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