NASDAQ Index, SP500, Dow Jones Forecasts – NASDAQ Retreats As NVIDIA Dives 6%

SP500 Moves Lower As Inflation Rate Exceeds Estimates

SP500 is losing ground as traders focus on CPI data. Inflation Rate increased by +0.4% month-over-month in October, compared to analyst forecast of +0.3%. Core Inflation Rate grew by +0.3%, exceeding the analyst estimate of +0.2%. The report indicated that inflationary pressure continued to increase.

Not surprisingly, Fed policy outlook changed after the release of the report. FedWatch Tool indicates that there is a 90.5% probability of a 25 bps rate hike at the next meeting in December. The probability of a 50 bps rate hike is estimated at 9.5%. The market believes that Fed will not have an opportunity to leave rates unchanged. Expectations of hawkish Fed put material pressure on SP500 in today’s trading session.

Treasury yields rallied as bond traders focused on hawkish changes in Fed policy outlook. The yield of 2-year Treasuries climbed above the 4.74% level, while the yield of 10-year Treasuries settled near the psychologically important 5.00% level. Rising Treasury yields served as a bearish catalyst for stocks.

Traders also monitored news from the Middle East. Oil prices rebounded from session lows but remained in the negative territory as traders bet that U.S. and Iran were moving towards a deal. That said, some traders were ready to buy the dip. It remains to be seen whether U.S. and Iran are ready for a deal in the near term. Dynamics of oil markets did not have a material impact on stocks today, but traders will remain focused on geopolitical news in upcoming trading sessions.

Financial and consumer defensive stocks were among the biggest gainers today. Basic materials stocks found themselves under strong pressure as traders reacted to the sell-off in precious metals markets.

Currently, SP500 is trying to settle below the 7500 level. In case this attempt is successful, SP500 will head towards the nearest support, which is located in the 7470 – 7480 range.

On the upside, SP500 needs to climb above the resistance at 7550 – 7560 to have a chance to gain upside momentum in the near term. In this case, SP500 will head towards the resistance at 7620 – 7630.

NASDAQ Retreats As NVIDIA Tests New Lows

NASDAQ pulled back as traders sold tech stocks amid hawkish Fed policy outlook. NVIDIA, which was down by -6%, was among the biggest losers in the NASDAQ index today. The company’s shares remained under pressure as analysts rushed to downgrade the stock amid spy scandal.

In case NASDAQ manages to settle below the 27,500 level, it will head towards the support at 27,100 – 27,150. On the upside, a successful test of the resistance at 27,950 – 28,000 will open the way to the test of the next resistance at 28,800 – 28,850.

Dow Jones Attempts To Settle Below 52,000

Dow Jones moved lower amid broad pullback in the equity markets. NVIDIA was the biggest loser in the Dow Jones index today.

If Dow Jones declines below the 50 MA at 52,106, it will head towards the support, which is located in the 51,400 – 51,500 range. A move below 51,400 will push Dow Jones towards the 50,800 level. On the upside, a move above the 52,400 level will open the way to the test of the resistance level at 52,800 – 52,900.

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