NASDAQ Index, SP500, Dow Jones Forecasts – Stocks Move Higher As Oil Dives 4%

SP500 Rebounds As Traders Prepare For Tomorrow’s Fed Decision

SP500 gains ground as traders focus on the strong pullback in the oil markets and prepare for tomorrow’s Fed Interest Rate Decision.

Oil markets are down by -4% as President Trump said that he preferred to avoid escalation. U.S. and Iran did not attack each other for four days, so traders bet that the temporary deal would be announced soon.

Treasury yields moved lower as bond traders reacted to the pullback in the oil markets. The yield of 2-year Treasuries declined towards the 4.27% level, while the yield of 10-year Treasuries tested the 4.60% level. Falling Treasury yields provided additional support to SP500 in today’s trading session.

Analysts expect that Fed will leave the federal funds rate unchanged, but FedWatch Tool indicates that there is a 31.5% probability of a rate hike tomorrow. Nevertheless, traders are cautiously bullish ahead of the Fed decision.

Today, traders also focused on CB Consumer Confidence report. The report indicated that CB Consumer Confidence declined from 92.2 in June to 90.8 in July, compared to analyst forecast of 92.3.

Case-Shiller Home Price Index report showed that home prices increased by +1.6% year-over-year in May, compared to analyst consensus of +1.3%. Wholesale Inventories grew by +0.3% month-over-month in June, exceeding the analyst forecast of +0.2%.

Most market sectors gained ground as rotation out of tech continued. Consumer defensive and healthcare stocks were among the biggest gainers today as demand for safe-haven assets increased ahead of Fed decision. Tech stocks were among the biggest losers amid valuation worries. Energy stocks have also moved lower as traders reacted to the pullback in the oil markets.

Currently, SP500 attempts to settle above the resistance at 7450 – 7460. In case this attempt is successful, SP500 will get to the test of the 50 MA at 7469. A move above the 50 MA will open the way to the test of the next resistance level at 7510 – 7520.

NASDAQ Moves Away From Session Lows As Treasury Yields Pull Back

NASDAQ rebounded from session lows, supported by the pullback in the oil markets and falling Treasury yields. However, AI-related stocks remained under pressure.

In case NASDAQ manages to settle back above the support at 27,850 – 27,900, it will head towards the resistance level at 28,300 – 28,350. RSI is in the moderate territory, so there is plenty of room to gain momentum in the near term.

On the support side, a move below the 27,700 level will push NASDAQ towards the support level at 27,400 – 27,450.

Dow Jones Tests Resistance At 52,700 – 52,800

Dow Jones gained ground amid sector rotation. Sherwin-Williams, which was up by +8.4%, was the biggest gainer today. The stock rallied as traders reacted to the better-than-expected earnings report.

From the technical point of view, Dow Jones attempts to settle above the resistance level at 52,700 – 52,800. If Dow Jones manages to settle above the 52,800 level, it will head towards the next resistance level at 53,300 – 53,400.

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