NASDAQ Index, SP500, Dow Jones Forecasts – NASDAQ Retreats As Micron Dives 12.5%

SP500 Tests Support At 7370 – 7380

SP500 retreats as traders focus on PMI reports and worry about valuations in the tech space.

Manufacturing PMI increased from 55.1 in May to 55.7 in June, compared to analyst forecast of 54.8. Services PMI grew from 50.7 to 51.3, while analysts expected that it would increase to 51.

The better-than-expected Manufacturing PMI and Services PMI provided support to Composite PMI, which increased from 51.5 to 52.2. Numbers above 50 show expansion.

From a big picture point of view, PMI reports indicated that U.S. economy remained in good shape. Thus, there’s no need to provide additional support to the economy, so the Fed could focus on fighting inflation. The hawkish Fed policy outlook served as a bearish catalyst for SP500 in today’s trading session.

The strong sell-off in the South Korean market raised worries about valuation of high-flying tech stocks. As a result, traders rushed to take profits off the table.

Oil prices moved lower as U.S. and Iran continued negotiations. President Trump said that Iran would use unfrozen funds to buy U.S. food and medical supplies. The traffic through the Strait of Hormuz is rising, which is bearish for oil markets. Falling oil prices did not provide support to SP500 as traders focused on the situation in the tech sector.

Tech stocks were among the biggest losers in today’s trading session. Basic materials stocks have also found themselves under strong pressure as traders reacted to the sell-off in precious metals markets.

Consumer defensive stocks gained ground amid rising demand for safe-haven assets. Real estate and utilities stocks have also moved higher as Treasury yields pulled back.

The nearest support level for SP500 is located in the 7370 – 7380 range. In case SP500 declines below the 7370 level, it will head towards the next support level at 7290 – 7300. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.

NASDAQ Dives As Traders Sell Tech Stocks

NASDAQ suffered a sell-off as traders rushed to sell tech stocks. Micron, which was down by -12.5%, was the biggest loser in the NASDAQ index today. The stock pulled back as traders took profits ahead of the earnings report, which would be released tomorrow after market close.

Currently, NASDAQ is trying to settle below the support at 29,350 – 29,400. In case NASDAQ settles below the 29,350 level, it will head towards the next support at 28,800 – 28,850. Traders should note that Micron’s earnings report will likely have a major impact on NASDAQ dynamics this week.

Dow Jones Attempts To Settle Back Above 51,700

Dow Jones was mostly flat amid rising demand for defensive sectors. Currently, Dow Jones is trying to settle back above the support level at 51,600 – 51,700.

In case this attempt is successful, Dow Jones will head towards the nearest resistance level at 52,100 – 52,200.

On the support side, a move below the 50 MA at 51,575 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.