NASDAQ Index, SP500, Dow Jones Forecasts – Powell, Geopolitics Put Pressure On Stocks

Key Insights

• SP500 is under strong pressure as traders reduce their risks amid rising geopolitical tensions. 
• NASDAQ is losing ground amid a strong sell-off in Tesla stock. 
• Dow Jones is trying to settle below the 33,500 level. 

SP500

SP500 settled below the previous support at 4335 – 4350 and is trying to settle below the next support at 4260 – 4280 as traders focus on Powell’s comments and the developments in the Middle East. Treasury yields tested new highs as Powell highlighted inflationary risks and noted that the economy remained strong. Bond traders bet that interest rates will stay high for longer, which is bearish for equity markets. Meanwhile, Israel is reportedly ready to start a ground operation in Gaza to fight against Hamas. The potential operation will likely push oil prices higher, putting additional pressure on the stock market as high energy prices will force the Fed to be more hawkish.

Traders are cutting their risks amid rising uncertainty. RSI is in the moderate territory, and SP500 has enough room to gain additional downside momentum.

NASDAQ

NASDAQ retreats as Tesla stock is down by 10% after the earnings report, which missed analyst estimates. In addition, Elon Musk said that price cuts were ineffective due to high interest rates.

In case NASDAQ settles below the 14,800 level, it will move towards the strong support level in the 14,560 – 14,680 range.

Dow Jones

Dow Jones is trying to settle below 33,600 amid a broad pullback in the equity markets. Most Dow Jones components are moving lower as investors’ appetite for risk is low due to rising Treasury yields and geopolitical tensions.

In case Dow Jones stays below 33,600, it will move towards the next support level at 33,000 – 33,100.

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