NASDAQ Index, SP500, Dow Jones Forecasts – SP500 Tests Historic Highs On Soft PPI Data

SP500 Tests Historic Highs As Rally Continues

SP500 tests new highs as traders focus on Producer Prices data. The report showed that PPI was unchanged on a month-over-month basis in July, compared to analyst consensus of +0.2%. Core PPI increased by +0.2%, compared to analyst forecast of +0.3%.

Treasury yields pulled back as bond traders reacted to Producer Prices report. The yield of 2-year Treasuries declined towards the 4.14% level, while the yield of 10-year Treasruies pulled back below 4.65%.

FedWatch Tool indicates that there is a 65.4% probability that Fed will keep rates unchanged at the next meeting in September. Expectations of a less hawkish Fed provide additional support to SP500.

Today, traders also had a chance to take a look at the Initial Jobless Claims report. The report indicated that 209,000 Americans filed for unemployment benefits in a week, compared to analyst forecast of 202,000.

Tech stocks were among the biggest gainers in the SP500 index today. Real estate stocks have also gained strong upside momentum as traders focused on falling Treasury yields.

Basic materials stocks found themselves under strong pressure as traders reacted to the pullback in precious metals markets. Healthcare stocks have also moved lower amid falling demand for safe-haven assets.

Currently, SP500 is trying to settle above the resistance level at 7790 – 7800. In case this attempt is successful, SP500 will move towards the 7850 level. RSI has recently moved into overbought territory, but there is enough room to gain additional upside momentum in the near term.

NASDAQ Moves Higher As Traders Buy The Stocks

NASDAQ gained ground amid strong demand for tech stocks. Sandisk and Western Digital were among the biggest gainers in the NASDAQ index today. The stocks rallied as demand for AI-related companies increased.

NASDAQ moved above the previous resistance at 29,850 – 29,900 and climbed above the 30,000 level. In case NASDAQ stays above 30,000, it will head towards the nearest resistance level at 30,350 – 30,400. A successful test of the resistance at 30,350 – 30,400 will push NASDAQ towards the next resistance level at 30,750 – 30,800.

On the support side, a move below the support level at 29,850 – 29,900 will open the way to the test of the 50 MA at 29,581.

Dow Jones Is Flat As Cisco Dives 9%

Dow Jones was mostly flat as Cisco shares dived -9% after the earnings report. The company’s stock suffered a strong sell-off despite the strong report. Traders are worried that high spending on AI hardware would squeeze Cisco’s margins.

Salesforce rallied 4% as JPMorgan said that AI threat to the company’s business was overblown. JPMorgan initiated coverage of the stock with an Overweight rating and a price target of $250.

In case Dow Jones stays below the 50 MA at 53,925, it will head towards the nearest support level, which is located in the 53,300 – 53,350 range. On the upside, the nearest resistance level for Dow Jones is located in the 54,000 – 54,100 range. A successful test of this level will push Dow Jones towards the next resistance at 54,600 – 54,700.

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