NASDAQ Index, SP500, Dow Jones Forecasts – NASDAQ Retreats As Traders Sell Tech Stocks Amid Valuation Worries

SP500 Is Under Pressure As Oil Prices Test New Highs

SP500 is losing ground as traders ignore the better-than-expected Michigan Consumer Sentiment report and focus on the sell-off in chip stocks.

Michigan Consumer Sentiment increased from 49.5 in June to 54.4 in July, compared to analyst forecast of 51. Current Economic Conditions increased from 47.7 to 54.9, while Index of Consumer Expectations grew from 50.7 to 54.0.

Year-ahead inflation expectations pulled back from 4.6% in June to 4.2% in July. Long-run inflation expectations remained unchanged at 3.3%.

Today, traders also had a chance to take a look at Building Permits and Housing Starts reports for June. Building Permits declined by -3% on a month-over-month basis, compared to analyst forecast of -0.7%. Housing Starts increased by +19%, compared to analyst forecast of 0%.

Industrial Production increased by +0.1% month-over-month in June, while analysts that it would grow by +0.2%.

Overall, the reports showed that economy remained in decent shape. However, valuation worries have triggered a pullback.

Energy stocks gained ground as traders reacted to the strong rally in the oil markets, which was triggered by escalation in the Middle East. Rising oil prices pushed Treasury yields higher as bond traders bet on hawkish Fed. Higher Treasury yields served as an additional bearish catalyst for stocks.

Most market sectors moved lower in today’s trading session. Tech and consumer cyclical stocks were among the biggest losers in the SP500 index today.

Currently, SP500 is trying to settle below the support level at 7450 – 7460. In case this attempt is successful, SP500 will move towards the next support, which is located in the 7360 – 7370 range. RSI is in the moderate territory, so there is plenty of room to gain additional downside momentum in the near term.

On the upside, a move above the 7500 level will push SP500 towards the 50 MA at 7532.  If SP500 climbs above the 50 MA, it will get to the test of the resistance at 7540 – 7550.

NASDAQ Pulls Back As Traders Stay Focused On Valuation Of AI Stocks

NASDAQ is losing ground amid sell-off in the tech sector. Traders remain worried about high valuation of AI-related stocks.

SpaceX shares, which were down by -5.7%, were among the biggest losers in the NASDAQ index today. The stock continues to move lower after the record IPO. Experienced traders wonder whether SpaceX IPO marked the high of the hype cycle.

NASDAQ failed to settle above the resistance at 28,800 – 28,850 and pulled back towards the 28,600 level. In case NASDAQ settles below 28,600, it will head towards the nearest support, which is located in the 28,250 – 28,300.

On the upside, a successful test of the resistance at 28,800 – 28,850 will open the way to the test of the next resistance level at 29,350 – 29,400.

Dow Jones Tests Support At 52,100 – 52,200

Dow Jones is moving lower amid broad pullback in the oil markets. Coca-Cola, which is down by -3.9%, is the worst performer in the Dow Jones index today. The company announced that a ransomware cyberattack had an impact on U.S. production operations.

A successful test of the support at 52,100 – 52,200 will open the way to the test of the next support level at 51,400 – 51,500.

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