NASDAQ Index, SP500, Dow Jones Forecasts – Stocks Move Lower Amid Strong Pullback In Bond Markets

SP500 Pulls Back As Treasury Yields Rise

SP500 is losing ground as traders focus on rising Treasury yields. The yield of 10-year Treasuries climbed above the 4.67% level, while the yield of 30-year Treasuries tested the 5.19% level.

Bond traders are worried that Fed will be forced to raise rates due to rising inflation. According to FedWatch Tool, there’s a 25.9% probability that Fed will raise rates at the meeting in September.

President Trump has recently threatened Iran with “big hit” in case the country did not agree to a deal. Trump noted that he was ready to provide Iran with a limited period of time to get the deal done. As a result, oil traders have started to prepare for a potential restart of the military operation against Iran. Rising oil prices reduced demand for risk assets and put some pressure on SP500.

Today, traders also had a chance to take a look at the Pending Home Sales report for April. The report indicated that Pending Home Sales increased by +1.4% month-over-month, compared to analyst consensus of +1%. On a year-over-year basis, Pending Home Sales increased by +3.2%.

Not surprisingly, energy stocks were among the biggest gainers today. Healthcare stocks have also managed to gain momentum. Basic materials stocks found themselves under pressure as traders reacted to the sell-off in precious metals markets.

Currently, SP500 is moving towards the support level at 7350 – 7360. In case SP500 manages to settle below the 7350 level, it will head towards the next support, which is located in the 7250 – 7260 range.

On the upside, SP500 needs to climb above the 50 MA at 7411 to gain upside momentum in the near term. In this case, SP500 will get to the test of the resistance level at 7425 – 7435.

NASDAQ Remains Under Pressure

NASDAQ moved lower as traders focused on the pullback in bond markets and worried about Fed policy outlook. However, traders were ready to buy chip stocks. Micron and Intel were among the biggest gainers in the NASDAQ index today.

In case NASDAQ stays below the 28,000 level, it will move towards the support, which is located in the 28,500 – 28,550 range. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.

On the upside, NASDAQ needs to settle back above the resistance at 29,200 – 29,250 to gain upside momentum in the near term. A successful test of the resistance at 29,200 – 29,250 will open the way to the test of the next resistance at 29,700 – 29,750.

Dow Jones Moves Lower As Traders Focus On Bond Markets

Dow Jones declined amid broad pullback in the equity markets. Amazon, which was down by -2.1%, was the worst performer in the Dow Jones index today.

From the technical point of view, Dow Jones failed to settle above the resistance at 49,700 – 49,800 and pulled back towards the 49,500 level. In case Dow Jones manages to settle below 49,500, it will move towards the support, which is located in the 49,000 – 49,100 range.

If Dow Jones manages to climb above the 49,800 level, it will get to the test of the psychologically important 50,000 level. A move above 50,000 will push Dow Jones towards the resistance at 50,400 – 50,500.

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