NASDAQ Index, SP500, Dow Jones Forecasts – NASDAQ Soars As Middle East Ceasefire Begins

SP500 Tests The 6800 Level

SP500 rallied as traders reacted to ceasefire in the Middle East. WTI oil declined below the $95.00 level, providing significant support to major indices.

Traders bet that ceasefire will provide an opportunity for constructive negotiations between U.S. and Iran, which will lead to a peace deal.

According to ceasefire terms, the Strait of Hormuz should be reopened. However, Iran claims that the Strait remains closed as Israel continues its military operation against Hezbollah in Lebanon. At this point, global markets ignore this issue and bet on successful negotiations.

Today, traders also focused on FOMC Minutes. The Minutes indicated that Fed saw risks of rising inflation due to conflict in the Middle East. FOMC Minutes also showed that Fed was ready to raise rates in case the war in Iran led to a longer-term increase in inflation. Fed worries that inflation will stay above the 2% target for longer. Overall, the Minutes were hawkish, which is not surprising as Fed had to make decisions amid geopolitical uncertainty.

The rally was broad, and most market sectors gained strong upside momentum in today’s trading session. Basic materials stocks were among the biggest gainers as traders reacted to the rally in precious metals markets. Industrials and Consumer Cyclical stocks have also gained solid momentum.

Not surprisingly, energy stocks were the only losers today. The strong sell-off in the oil markets put significant pressure on the energy sector.

Currently, SP500 is trying to stay above the resistance level at 6760 – 6770. In case this attempt is successful, SP500 will head towards the 6800 level. A move above 6800 will open the way to the test of the resistance at 6850 – 6860. RSI is in the overbought territory, but there is enough room to gain momentum in the near term.

On the support side, a move below the 6760 level will push SP500 towards the 6700 level. In case SP500 settles back below 6700, it will move towards the support level at 6640 – 6650.

NASDAQ Rallies As Traders Rush To Buy Tech Stocks

NASDAQ rallied on ceasefire optimism. Rising appetite for risk provided significant support to tech stocks, which was bullish for NASDAQ.

Intel, which was up by 10%, was among the biggest gainers in the NASDAQ index today. Western Digital and Seagate have also gained strong momentum in today’s trading session.

The nearest resistance level for NASDAQ is located in the 25,150 – 25,200 range. A successful test of the 25,200 level will open the way to the test of the next resistance at 25,750 – 25,800. RSI has just moved back into the moderate territory, so there is plenty of room to gain additional upside momentum in case the right catalysts emerge.

Dow Jones Attempts To Settle Above 48,000

Dow Jones tested new highs amid broad rally in the equity markets. Caterpillar, which was up by 6.4%, was the biggest gainer in the Dow Jones index today. Falling oil markets provided strong support to industrials stocks as traders bet that global economy will gain steam in case energy prices decline.

From the technical point of view, Dow Jones climbed above the previous resistance level at 47,400 – 47,500 and is trying to settle above the 48,000 level. In case this attempt is successful, Dow Jones will get to the test of the resistance at 48,200 – 48,300.

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