NASDAQ Index, SP500, Dow Jones Forecasts – NASDAQ Rebounds From Session Lows As Traders Focus On PCE Inflation Data

SP500 Stays Range-Bound As Traders Focus On PCE Report

SP500 is swinging between gains and losses as traders focus on PCE Price Index report. The report indicated that PCE Price Index remained unchanged at 3.7% in July, compared to analyst forecast of 3.6%.

Durable Goods Orders increased by +1.1% month-over-month in July, compared to analyst consensus of +0.5%. GDP Growth Rate was +1.5% in the second quarter, in line with analyst expectations.

Today, traders also had a chance to take a look at Personal Spending and Personal Income reports. Personal Spending increased by +0.2% month-over-month in July, compared to analyst forecast of +0.1%. Personal Income increased by +0.4%, exceeding the analyst consensus of +0.2%.

From a big picture point of view, the reports showed that economy remained in decent shape but inflationary risks were rising. Not surprisingly, Treasury yields moved higher. The yield of 2-year Treasuries settled above the 4.22% level, while the yield of 10-year Treasuries climbed above 4.66%.

FedWatch Tool indicates that the market expects that Fed will leave the federal funds rate unchanged in September. However, traders expect that Fed will start the rate hike cycle in October. Interestingly, rising Treasury yields and hawkish changes in Fed policy outlook did not put material pressure on SP500 index today.

Industrials and tech stocks were among the best performers today. Basic materials stocks moved lower as traders focused on the pullback in precious metals markets. Healthcare and consumer cyclical stocks have also found themselves under material pressure.

In case SP500 climbs above the 50 MA at 7703, it will head towards the resistance level at 7720 – 7730.  A successful test of this level will open the way to the test of the next resistance at 7805 – 7815. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.

On the support side, a move below the 7650 level will push SP500 towards the support at 7615 – 7625.

NASDAQ Moves Away From Session Lows

NASDAQ was mostly flat as traders reacted to economic reports. From the technical point of view, NASDAQ failed to settle below the support level at 29,100 – 29,150 and is trying to gain upside momentum.

In case this attempt is successful, NASDAQ will head towards the nearest resistance at 29,450 – 29,500. A move above the 29,500 level will push NASDAQ towards the 29,900 level.

On the support side, NASDAQ needs to settle below the support level at 29,100 – 29,150 to have a chance to gain downside momentum in the near term. In this case, NASDAQ will move towards the next support level at 28,700 – 28,750.

Dow Jones Moves Lower As Traders Focus On Inflation Risks

Dow Jones is losing some ground amid pullback in healthcare and consumer sectors. Merck, which is down by -2.1%, is the biggest loser in the Dow Jones index today.

Currently, Dow Jones is trying to settle below the support level at 53,300 – 53,400. In case this attempt is successful, Dow Jones will move towards the next support at 52,800 – 52,900.

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