NASDAQ Index, SP500, Dow Jones Forecasts – Stocks Dive As Traders Worry That U.S. Plans A Ground Operation In Iran

SP500 Pulls Back As Traders Focus On The Potential Ground Operation In Iran

SP500 is under strong pressure amid reports indicating that U.S. prepares for a potential ground operation in Iran.

Wall Street Journal reported that U.S. was sending additional marines and warships to the Middle East.

According to CBS, U.S. is actively preparing for a ground operation, which would be a huge escalation of the conflict. Axios reported that U.S. was thinking about occupying the Kharg Island, which plays a key role in Iranian oil exports.

Meanwhile, Iranian officials noted that they would not negotiate on the Strait of Hormuz when the country was under attack. All recent reports show that neither U.S. nor Israel plan to stop the military operation against Iran.

Not surprisingly, oil prices rallied as traders focused on the risks of a ground operation in Iran. WTI oil climbed above the $98.00 level, while Brent oil soared towards the $113.00 level.

From a big picture point of view, traders prepare for an additional escalation in the Middle East. Iran has previously said that it would destroy oil and gas assets in the Gulf in case its own facilities are attacked. Recent action indicates that Iran is not bluffing and would be ready to deal as much damage as possible.

High energy prices will put material pressure on the global economy. There is no end in sight for the Middle East war, and traders have started to evaluate worst-case scenarios.

The pullback was broad, and most market sectors moved lower in today’s trading session. Energy stocks managed to gain some ground but traders were cautious as high oil prices could ultimately hurt demand for energy.

Utilities stocks were among the biggest losers today as traders focused on rising Treasury yields. The yields are moving higher as traders bet that Fed would be hawkish due to high energy prices.

Basic materials stocks have also found themselves under significant pressure as traders reacted to the sell-off in precious metals markets.

Currently, SP500 is trying to settle below the support level at 6510 – 6520. In case this attempt is successful, SP500 will head towards the next support, which is located in the 6440 – 6450 range.

NASDAQ Is Under Pressure As The Appetite For Risk Declines

NASDAQ is losing ground as traders sell tech stocks amid falling appetite for risk. Market leaders like Western Digital, Micron, and Seagate are among the worst performers in the NASDAQ index today.

From the technical point of view, NASDAQ attempts to settle below the support level at 23,950 – 24,000. If NASDAQ manages to settle below the 23,950 level, it will head towards the support at 23,500 – 23,550. RSI has recently moved into oversold territory, but there is enough room to gain additional momentum in the near term.

Dow Jones Tests Support At 45,700 – 45,800

Dow Jones retreats amid broad pullback in the equity markets. The pullback is led by Boeing, which is down by 3.7%. Boeing stock has been under pressure in recent weeks amid worries about global economy.

In case Dow Jones manages to settle below the support level at 45,700 – 45,800, it will head towards the next support at 45,100 – 45,200. RSI remains in the moderate territory, so there is plenty of room to gain additional downside momentum in case the right catalysts emerge.

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