SP500 Pulls Back As Tech Stocks Decline
SP500 is losing ground as traders stay focused on Nvidia‘s problems. The stock is down by -2.2% as the market attempts to evaluate the company’s future after Jensen Huang left Nvidia.
A Bloomberg report has recently indicated that a company linked to Alice Huang was smuggling Nvidia chips to China. The scandal is not over yet, but trading action indicates that some market players are ready to buy the dip in Nvidia stock.
Today, traders also focused on PPI report. The report showed that PPI increased by +0.3% month-over-month in October, compared to analyst forecast of +0.4%. Core PPI grew by +0.3%, in line with analyst expectations. Lower-than-expected PPI report did not provide support to SP500 due to the negative impact of Nvidia’s drama.
Oil markets were mostly flat as traders waited for additional catalysts. Potential escalation in the Middle East will remain a significant risk for stocks in the near term.
Consumer defensive stocks were among the biggest gainers today as demand for safe-haven assets declined. Tech stocks found themselves under material pressure.
SP500 managed to rebound from session lows and is trying to settle back above the support at 7550 – 7560. In case this attempt is succesful, SP500 will move towards the resistance level, which is located in the 7620 – 7630 range.
On the support side, a successful test of the support at 7550 – 7560 will open the way to the test of the next support level at 7475 – 7485.
NASDAQ Tests Support At 27,950 – 28,000
NASDAQ pulled back as traders sold AI stocks. Advanced Micro Devices, which was down by -9%, was the biggest loser in the NASDAQ index today. The stock suffered a sell-off as traders worried that Nvidia’s scandal will increase regulatory pressure and hurt AI deals.
Currently, NASDAQ is trying to settle below the support level at 27,950 – 28,000. In case this attempt is successful, NASDAQ will head towards the next support, which is located in the 27,100 – 27,150 range.
On the upside, NASDAQ needs to settle back above the 28,000 level to have a chance to gain upside momentum in the near term. In this case, NASDAQ will head towards the resistance level at 28,800 – 28,850.
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See all Dow Jones forecastsDow Jones Is Flat Amid Rising Demand For Defensive Sectors
Dow Jones was mostly flat as demand for defensive assets increased. Coca-Cola, which gained +1.8%, was the best performer in the Dow Jones index today. Cisco pulled back by -6.2% as traders reacted to the company’s earnings report, which highlighted pressure on margins.
The technical picture remains unchanged as Dow Jones continues its attempts to settle below the support level at 52,300 – 52,400. If Dow Jones manages to settle below the 52,300 level, it will head towards the next support level at 51,400 – 51,500. RSI is in the moderate territory, so there is plenty of room to gain additional downside momentum in case the right catalysts emerge.
On the upside, a move above the 52,400 level will push Dow Jones towards the resistance level at 52,800 – 52,900.
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