NASDAQ Index, SP500, Dow Jones Forecasts – SP500 Moves Above 5000 As NVIDIA Tests New Highs

Key Insights

• SP500 climbed above the key 5000 level as the strong rally continued. 
• NASDAQ rallied amid rising demand for tech stocks. 
• Dow Jones moved lower as defensive sectors did not attract buyers today.

SP500

SP500 settled above the 5000 level and continued to move higher as market sentiment remained extremely bullish ahead of the weekend. Today, traders focused on the final reading of inflation reports for December. November CPI was adjusted from 0.1% to 0.2%, while December CPI was revised down from 0.3% to 0.2%. Rising demand for tech stocks remained the key driver for SP500. At this point, it looks that traders are ready to buy almost any stock in the sector. Meanwhile, Consumer Defensive and Energy stocks have found themselves under pressure in today’s trading session.

SP500 has just settled above the psychologically important 5000 level, so it has a good chance to develop additional upside momentum. RSI is in the overbought territory, so the risks of a pullback are increasing. However, high RSI is typical for a strong trend, so SP500 has enough room to gain momentum.

NASDAQ

NASDAQ tests new highs as traders keep buying tech stocks. NVIDIA tested new highs again as the strong rally continued. A classic FOMO scenario is playing out in NVIDIA stock, which is up by almost 50% year-to-date after a very strong 2023. Traders do not want to miss a major opportunity in the AI space, so they buy shres of NVIDIA regardless of their current valuation, hoping that earnings estimates would quickly increase due to high demand for AI chips.

Not surprisingly, NASDAQ is overbought. No resistance levels have been formed as NASDAQ is in the unchartered territory, so traders should be prepared for fast moves.

Dow Jones

Dow Jones moved lower due to pullbacks in Caterpillar, Chevron, and Disney stocks. Traders are focused on tech stocks, which is somewhat bearish as Dow Jones index includes a number of defensive stocks.

The nearest support level for Dow Jones is located in the 38,500 – 38,550 range. A move below this level will open the way to the test of the next support at 38,100 – 38,150.

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