SP500 Pulls Back As GDP Growth Rate Exceeds Estimates
SP500 is losing ground as traders react to strong GDP data. GDP Growth Rate was +3.4% in the third quarter, compared to analyst forecast of +3.2%. The report indicated that economy continued to grow at a robust pace, increasing the probability of a rate hike at the next Fed meeting in December.
Traders also had a chance to take a look at inflation data. PCE Price Index increased from 3.4% in August to 3.6% in September, in line with analyst estimates. Core PCE Price Index grew from 3% to 3.1%. The report has also met analyst expectations.
Personal Income increased by +0.2% month-over-month in September, compared to analyst forecast of +0.3%. Personal Spending increased by +0.5%, below the analyst forecast of +0.6%.
Initial Jobless Claims report indicated that 194,000 Americans filed for unemployment benefits in a week, compared to analyst forecast of +199,000. Job market remains in decent shape, which is another reason why Fed will likely raise rates in December.
Traders also monitored the situation in the oil markets. Oil prices gained some ground as traders prepared for the potential restart of the war against Iran. However, the moves were not strong as bulls remained cautious amid uncertainty.
Real estate and healthcare stocks were among the biggest gainers today amid sector rotation. Communication services and tech stocks found themselves under strong pressure. Basic materials stocks have also moved lower as precious metals markets suffered a strong sell-off.
SP500 declined below the support at 7720 – 7730 and is trying to settle below the 50 MA at 7703. In case SP500 declines below the 50 MA, it will head towards the next support at 7615 – 7625.
NASDAQ Moves Lower As Traders Focus On Alphabet’s Earnings Report
NASDAQ is losing ground as traders react to Alphabet‘s report. Alphabet is down by -12% as the report missed analyst estimates and showed that AI hurt traditional search business. Traders are worried that Alphabet spends too much money on AI, which cannibilizes company’s traditional business.
Currently, NASDAQ is trying to settle below the support level at 29,250 – 29,300. In case NASDAQ manages to settle below the 29,250 level, it will head towards the next support, which is located in the 28,850 – 28,900 range. RSI is in the moderate territory, so there is plenty of room to gain additional downside momentum in case the right catalysts emerge.
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See all Dow Jones forecastsDow Jones Tests Support At 52,300 – 52,400
Dow Jones is losing ground amid broad pullback in the equity markets. The sell-off in Alphabet stock put significant pressure on the Dow Jones index. Caterpillar, which was down by -9.5%, was another big loser in the index today. The stock declined despite the better-than-expected earnings report.
Dow Jones attempts to settle below the support at 52,300 – 52,400. If Dow Jones settles below the 52,300 level, it will head towards the next support, which is located in the 51,700 – 51,800 range.
On the upside, a move above the 50 MA at 52,449 will push Dow Jones towards the resistance level at 52,800 – 52,900.
For a look at all of today’s economic events, check out our economic calendar.