NASDAQ Index, SP500, Dow Jones Forecasts – NASDAQ Retreats As 10-Year Yield Tests 19-Year Highs

SP500 Moves Lower As WTI Oil Tests New Highs

SP500 is losing ground as traders focus on the strong rally in the oil markets and prepare for tomorrow’s Fed Interest Rate Decision.

The yield of 10-year Treasuries continued its attempts to settle above the 5.00% level as bond traders bet that Fed will start the rate hike cycle tomorrow. According to FedWatch Tool, the probability of a rate hike has increased to 92.5%. The market expects that Fed will raise the federal funds rate by at least 100 bps by October 2027.

WTI oil rallied above the $105.00 level as Houthis continued to attack Saudi Arabia. The country’s East-West pipeline is expected to be closed for weeks after an attack from pro-Iran militias in Iraq. The oil market prepares for deficit, which makes the Fed policy outlook more hawkish.

Not surprisingly, energy stocks managed to gain strong momentum in today’s trading session. Basic materials stocks were mostly flat as precious metals markets were swinging between gains and losses in choppy trading. Other market sectors moved lower amid worries about rising interest rates. Consumer cyclical and utilities stocks were among the biggest losers today.

SP500 pulled back below the previous support at 7615 – 7625 and is trying to settle below the 7600 level. In case this attempt is successful, SP500 will head towards the next support, which is located in the 7530 – 7540 range. RSI remains in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.

NASDAQ Is Under Pressure As Traders Worry About Hawkish Fed

NASDAQ moved lower as traders worried that high interest rates will hurt AI-related companies. AI leaders must raise money to fund huge investments, so high interest rates hurt their financial performance.

Strategy, which was down by -5%, was among the worst performers in the NASDAQ index today. The stock moved lower as Clarity Act failed to get the 60 votes in the U.S. Senate. Bitcoin pulled back by -3% as crypto traders reacted to the news, which was bearish for Strategy stock.

Currently, NASDAQ is trying to settle below the 29,000 level. In case this attempt is successful, NASDAQ will head towards the nearest support, which is located near recent lows at 28,800 – 28,850. On the upside, a successful test of the resistance level at 29,100 – 29,150 will open the way to the test of the 50 MA at 29,368.

Dow Jones Retreats Amid Rising Treasury Yields

Dow Jones tested new lows amid broad pullback in the equity markets. Most stocks in the Dow Jones index moved lower in today’s trading session. Amazon, which was down by -2.1%, was the biggest loser in the Dow Jones index today.

Dow Jones settled below the previous support at 52,200 – 52,300 and is trying to settle below the 52,000 level. If Dow Jones manages to settle below 52,000, it will head towards the support at 51,600 – 51,700. RSI is close to the oversold territory, but there is enough room to gain additional downside momentum in case the right catalysts emerge.

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