NASDAQ Index, SP500, Dow Jones Forecasts – NASDAQ Retreats As Intel Dives 7%

SP500 Tests Support At 7540 – 7550

SP500 is losing ground as traders react to economic reports and focus on the strong sell-off in the oil markets.

Housing Starts decreased by -15.4% month-over-month in May, compared to analyst consensus of -2.0%. Building Permits declined by -0.7%, while analysts expected that they would fall by -0.6%.

WTI oil is down by -6% as traders prepare for the reopening of the Strait of Hormuz. According to recent reports, the U.S. will provide Iran with a sanctions waiver, and the country will be able to sell its oil. Traders expect that Iranian oil will be sold at a discount and put more pressure on oil prices.

Treasury yields pulled back as traders focused on the strong sell-off in the oil markets, which could make the Fed less hawkish. The yield of 2-year Treasuries declined towards the 4.04% level, while the yield of 10-year Treasuries settled near 4.42%. Falling Treasury yields did not provide support to SP500 in today’s trading session.

Stock traders also prepare for the Fed decision, which will be released tomorrow. Analysts expect that Fed will keep rates unchanged, and traders will focus on comments from Fed Chair Warsh.

Industrials and financial stocks are among the biggest gainers in the SP500 today. Not surprisingly, energy stocks found themselves under pressure as traders focused on the strong sell-off in the oil markets. Tech stocks have also moved lower.

Currently, SP500 is trying to settle back below the support at 7540 – 7550. In case this attempt is successful, SP500 will move towards the next support level, which is located in the 7450 – 7460 range.

NASDAQ Moves Lower Amid Profit-Taking

NASDAQ retreats as traders take some profits off the table after the strong rally. Intel, which is down by -7%, is among the biggest losers in the NASDAQ index today. It looks that traders are cautious ahead of tomorrow’s Fed decision and worry that Warsh may be more hawkish than previously expected.

NASDAQ failed to settle above the resistance at 30,750 – 30,800 and pulled back below the 30,250 level. In case NASDAQ settles below 30,250, it will head towards the support at 29,800 – 29,850. A move below the 29,800 level will open the way to the test of the 50 MA at 29,604.

On the upside, NASDAQ needs to settle back above the resistance at 30,250 – 30,300 to gain upside momentum in the near term.

Dow Jones Tests Historic Highs As Rally Continues

Dow Jones gained ground amid rising demand for financial and industrials stocks. JPMorgan, which was up by +3.3%, was the biggest gainer in the Dow Jones index today.

From the technical point of view, Dow Jones settled above the previous resistance level at 51,600 – 51,700 and is trying to settle above the next resistance at 52,100 – 52,200. In case this attempt is successful, Dow Jones will head towards the 52,500 level. RSI is close to the overbought territory, but there is enough room to gain momentum in the near term.

On the support side, a move below the 51,600 level will open the way to the test of the support level at 51,000 – 51,100.

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