NASDAQ Index, SP500, Dow Jones Forecasts – Stocks Dive As Treasury Yields Test Yearly Highs

SP500 Tests Support At 7425 – 7435

SP500 is losing ground as traders react to the sell-off in bond markets and focus on rising oil prices.

The yield of 2-year Treasuries climbed above the 4.08% level amid inflation fears. Importantly, the yield of 30-year Treasuries settled above the key 5.00% level and moved towards 5.12%. The continuation of this move may have a significant impact on markets.

It should be noted that the bond market sell-off was global. Bonds in the UK, Japan, France, Germany, Italy and other developed countries found themselves under strong pressure.

WTI oil climbed above the $105.00 level as traders worried that U.S. may restart the military operaton against Iran. The Strait of Hormuz remains de-facto blocked, and U.S. – Iran negotiations have stalled. Trump – Xi summit concluded without any progress on Iran.

Today, traders had a chance to take a look at the Industrial Production report for April. The report indicated that Industrial Production increased by +0.7% month-over-month, compared to analyst forecast of +0.3%. The better-than-expected report did not provide support to SP500 as traders focused on stronger catalysts.

Energy stocks gained ground as traders focused on rising natural gas and oil markets. Other sectors moved lower in today’s trading session. Basic materials stocks suffered a sell-off as traders reacted to the strong pullback in precious metals markets. Utilities have found themselves under pressure due to rising Treasury yields.

Currently, SP500 is trying to settle below the support level at 7425 – 7435. In case this attempt is successful, SP500 will head towards the 50 MA at 7396. A move below the 50 MA will open the way to the test of the next support level, which is located in the 7350 – 7360 range.

NASDAQ Pulls Back As Treasury Yields Test New Highs

NASDAQ pulled back as traders rushed to take profits near historic highs amid geopolitical uncertainty and rising Treasury yields. Intel, which was down by 6%, was among the biggest losers in the NASDAQ index today. Other chip stocks have also found themselves under pressure. The key question is whether traders will use today’s pullback as an opportunity to increase their long positions in AI-related stocks or the market is ready for a stronger pullback.

NASDAQ attempts to settle below the support level at 29,200 – 29,250. If NASDAQ manages to settle below the 29,200 level, it will head towards the 50 MA at 28,998. A move below the 50 MA will push NASDAQ towards the support level at 28,500 – 28,550.

Dow Jones Moves Lower As Boeing Pulls Back By 3.2%

Dow Jones is losing ground amid broad pullback in the equity markets. Boeing, which is down by 3.2%, is among the biggest losers in the Dow Jones index today. The stock continues to move lower as the new deal with China fell short of analyst expectations.

From the technical point of view, Dow Jones moved below the support at 49,700 – 49,800 and is trying to settle below the 49,500 level. In case this attempt is successful, Dow Jones will move towards the next support at 49,000 – 49,100. RSI is 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.