SP500 slipped below the 4550 level as traders focused on the rebound in Treasury yields.
NASDAQ moved lower amid a pullback in AI-related stocks.
Dow Jones made an attempt to settle above the strong resistance at 35,550 – 35,700.
SP500 301123 4h Chart
SP500 pulls back as traders react to the economic reports. Personal Income increased by 0.2% month-over-month in October, while Personal Spending grew by 0.2%. Both reports met analyst estimates. PCE Price Index was unchanged in October, while Core PCE Price Index increased by 0.2%. The reports showed that Fed’s measures were working well, and it looks that inflation is finally under control, although there is plenty of work to do. Pending Home Sales declined by 1.5% month-over-month in October, which is not surprising in the high mortgage rate environment. Treasury yields were moving higher as bond traders took some profits off the table after the recent move. U.S. dollar gained ground against a broad basket of currencies, which was also bearish for major indices.
From the technical point of view, SP500 is slowly moving away from the key resistance at 4575 – 4600. In case SP500 continues to move lower, traders may decide to take profits, which may trigger a sell-off.
NASDAQ 301123 4h Chart
NASDAQ retreats as traders focus on the strong pullbacks in NVIDIA and Advanced Micro Devices stocks. Profit-taking in AI-related stocks may serve as a material negative catalyst for NASDAQ in the upcoming trading sessions, although it remains to be seen whether traders are ready to move out of this attractive market segment.
Currently, NASDAQ tests support at 15,800 – 15,900. In case this test is successful, NASDAQ will head towards the next support level in the 15,200 – 15,350 range.
Dow Jones 301123 4h Chart
Dow Jones tested new highs due to the rally in Salesforce shares. The stock is up by 7.4% as traders react to the strong earnings report and solid guidance.
if Dow Jones settles above the resistance at 35,550 – 35,700, it will head towards the next resistance level, which is located in the 36,350 – 36,500 range.
Vladimir is an independent trader and analyst with over 10 years of experience in the financial markets. He is a specialist in stocks, futures, Forex, indices, and commodities areas using long-term positional trading and swing trading.