NASDAQ Index, SP500, Dow Jones Forecasts – NASDAQ Tests Historic Highs As Intel Soars 14%

SP500 Tests New Highs As Non Farm Payrolls Beat Estimates

SP500 tests new highs as rally continues. Traders react to the strong Non Farm Payrolls report, which showed that U.S. economy added +115,000 jobs in April, compared to analyst forecast of +62,000. The previous report was revised from +178,000 to +185,000.

Unemployment Rate remained unchanged at 4.3%, in line with analyst estimates. The reports indicated that the job market remained in decent shape despite rising energy prices.

Today, traders also had a chance to take a look at the Michigan Consumer Sentiment report for May . The report indicated that Consumer Sentiment decreased from 49.8 in April to 48.2 in May, compared to analyst consensus of 49.5.

The University of Michigan commented: “[…] consumers continue to feel buffeted by cost pressures, led by soaring prices at the pump.”

Year-ahead inflation expectations pulled back from 4.7% in April to 4.5% in May, while long-run inflation expectations declined from 3.5% to 3.4%.

Tech stocks were among the biggest gainers in the SP500 today. Basic materials stocks have also gained strong upside momentum as traders focused on rising precious metals markets. Energy stocks found themselves under pressure as natural gas and oil markets moved lower.

From the technical point of view, SP500 settled above the previous resistance at 7350 – 7360 and is trying to settle above the 7400 level. In case this attempt is successful, SP500 will head towards the 7450 level.

NASDAQ Soars As Tech Stocks Rally

NASDAQ rallied amid strong demand for tech stocks. Intel, which was up by 14%, was the biggest gainer in the NASDAQ index today. The stock rallied as WSJ reported that Apple reached preliminary deal with Intel to manufacture chips used in Apple devices. Apple stock gained 2.1% on the news.

From a big picture point of view, traders rush to buy AI-related stocks. The market is in a state of euphoria. Traders are worried that they will miss the next leg of a powerful rally and are ready to buy AI stocks at any price.

NASDAQ settled above the resistance level at 28,500 – 28,550 and climbed towards the resistance at 29,200 – 29,250. A move above the 29,250 level will push NASDAQ towards the psychologically important 30,000 level. RSI is in the extremely overbought territory, so the risks of a pullback are increasing.

Dow Jones Retreats On Sector Rotation

Dow Jones pulled back as demand for consumer and industrials stocks declined. Traders are worried that high energy prices will put pressure on these sectors.

Salesforce, which was down by 2.7%, was among the biggest losers in the Dow Jones index today. The stock pulled back as traders remained worried that AI will put significant pressure on the business of software companies.

Dow Jones failed to settle above the resistance at 49,700 – 49,800 and is moving towards the 50 MA at 49,407. In case Dow Jones pulls back below the 50 MA, it will head towards the support, which is located in the 49,000 – 49,100 range. A successful test of the support at 49,000 – 49,100 will open the way to the test of the next support level at 48,200 – 48,300.

On the upside, a move above the resistance at 49,700 – 49,800 will lead to the test of the 50,000 level. If Dow Jones climbs above 50,000, it will head towards the 50,500 level.

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