NASDAQ Index, SP500, Dow Jones Forecasts – NASDAQ Tests New Highs As Traders Bet On Dovish Fed

SP500

SP500 tests historic highs as traders focus on the weak ADP Employment Change report and bet that Fed will be forced to cut rates. The report indicated that private businesses cut 32,000 jobs in September, compared to analyst forecast of +50,000. Today, traders also had a chance to take a look at the ISM Manufacturing PMI report. The report showed that ISM Manufacturing PMI improved from 48.7 in August to 49.1 in September, compared to analyst forecast of 49.0. Numbers below 50 show contraction. It should be noted that traders have completely ignored the U.S. government shutdown, which was not surprising as such events had limited impact on stocks in the past. Healthcare stocks were among the biggest gainers in the SP500 index today, while financial stocks have found themselves under pressure.

Currently, SP500 is trying to stay above the resistance at 6700 – 6710. In case this attempt is successful, SP500 will move towards the 6750 level. RSI is close to the overbought territory, but there is enough room to gain additional upside momentum in case the right catalysts emerge.

NASDAQ

NASDAQ gains ground as traders bet on dovish Fed. Astrazeneca, Biogen and Regeneron Pharmaceuticals are the biggest gainers in the NASDAQ index today. These healthcare stocks rallied on positive drug-related news, which were specific for each company.

A successful test of the resistance at 24,750 – 24,800 will push NASDAQ towards the psychologically important 25,000 level.

Dow Jones

Dow Jones is moving higher as traders bet that Fed will cut rates at the next meeting due to weak labor market data. Merck, which is up by 7.9%, is the biggest gainer in the Dow Jones index today.

From the technical point of view, Dow Jones needs to settle above the resistance at 46,600 – 46,700 to gain additional upside momentum in the near term.

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