NASDAQ Index, SP500, Dow Jones Forecasts – NASDAQ Retreats As Brent Oil Rallies Above $100

SP500 Retreats As Treasury Yields Rise

SP500 is losing ground as traders react to Bessent’s decision to boost bond buybacks to $6 billion and focus on the rally in the oil markets.

The Treasury will increase bond buybacks to push yields lower. The bond market is not impressed as Treasury yields moved higher in today’s trading session. The yield of 2-year Treasuries climbed above the 4.43% level, while the yield of 10-year Treasuries settled above 4.84%. Traders are worried that the situation in bond markets will get out of control.

Brent oil climbed above the psychologically important $100 level as traders focused on escalation in the Middle East. U.S. said that it destroyed Iranian tankers in response to an attack on a Navy warship. Iran noted that it was ready for escalation.

FedWatch Tool indicates that the probability of a rate hike at the next meeting has increased to 62.4%. The market believes that Fed will be forced to raise rates to fight inflation due to high oil prices.

I’d note that the situation in the oil markets may get worse as global oil reserves are falling on a daily basis. At some point, the countries will be forced to stop using reserves at today’s rates, which would lead to deficit and push prices higher. It remains to be seen whether U.S. and Iran will get back to negotiations before this point is reached.

Not surprisingly, stock traders are worried about recent developments and prefer to take some money off the table ahead of Fed decision, which will be released next week.

Energy stocks are the only gainers today. Industrials and consumer cyclical stocks found themselves under strong pressure amid worries about high oil prices.

The nearest support level for SP500 is located in the 7615 – 7625 range. In case SP500 declines below the 7615 level, it will head towards the next support, which is located in the 7530 – 7540 range.

NASDAQ Tests Support At 29,450 – 29,500

NASDAQ is moving lower as traders react to the rally in the oil markets and worry about hawkish Fed.

Currently, NASDAQ is trying to settle below the support level at 29,450 – 29,500. In case this attempt is successful, NASDAQ will move towards the next support at 29,100 – 29,150. RSI is in the moderate territory, so there is plenty of room to gain additional downside momentum in case the right catalysts emerge.

Dow Jones Moves Lower As Oil Markets Rally

Dow Jones is losing ground amid falling demand for consumer and industrials stocks. Nike, which is down by -2.3%, is among the biggest losers in the Dow Jones index today.

Dow Jones pulled back below the 52,500 level and moved towards the support at 52,200 – 52,300. A successful test of the support at 52,200 – 52,300 will open the way to the test of the next support level, which is located in the 51,500 – 51,600 range. RSI has already moved into oversold territory, but there is enough room to gain additional momentum in the near term.

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