NASDAQ Index, SP500, Dow Jones Forecasts – Stocks Move Lower As Traders Focus On CPI Data

SP500 Declines As Treasury Yields Rise

SP500 pulled back as traders reacted to inflation data and geopolitical developments.

Inflation Rate remained unchanged at 2.4%, in line with analyst estimates. Core Inflation Rate has also met analyst expectations at 2.5%.

While inflation was unchanged, Treasury yields moved higher. The yield of 2-year Treasuries climbed towards the 3.65% level, while the yield of 10-year Treasuries settled above 4.20%. Bond traders worry that high oil prices will force the Fed to be more hawkish than previously expected. Rising Treasury yields have put additional pressure on stocks.

It should be noted that oil prices moved higher despite the IEA decision to release as much as 400 million barrels from strategic reserves. The exact timing of this move is unclear. Traders have ignored this decision and focused on the Strait of Hormuz, which remained shut. In addition, Iran continued to attack oil-related facilities in the region.

Iran has also noted that it would strike banks after one of its banks got hit. According to recent reports, banks have started to evacuate staff in Dubai, which is one of the world’s key financial centers.

President Trump said that U.S. could strike more targets in Iran. Meanwhile, FBI issued a warning that Iran could use drones to strike the U.S. West Coast. Such a move would be a major escalation, which could make ending the operation without a capitulation from Iran politically impossible. At this point, traders do not believe in such a scenario.

Energy stocks were among the gainers today as traders focused on the developments in oil and natural gas markets. Tech stocks have also found some support. Other market sectors moved lower in today’s trading session.

Currently, SP500 is trying to settle below the nearest support level at 6780 – 6790. In case this attempt is successful, SP500 will head towards the next support, which is located in the 6710 – 6720 range. RSI is in the moderate territory, and there is plenty of room to gain momentum in the near term.

NASDAQ Moves Lower As Traders Focus On Rising Oil Prices

NASDAQ is losing some ground as traders stay focused on the situation in the Middle East and react to rising Treasury yields.

Micron, which is up by 4.1%, is the biggest gainer in the NASDAQ index today. Traders stay focused on AI leaders despite geopolitical tensions.

If NASDAQ pulls back below the 50 MA at 24,822, it will move towards the nearest resistance at 24,700 – 24,750. A move below the 24,750 level will push NASDAQ towards the 24,400 level.

Dow Jones Tests Support At 47,100 – 47,200

Dow Jones is losing ground amid falling demand for consumer and industrials stocks.

Chevron, which is up by 2.4%, is the only notable gainer in the Dow Jones index today. The stock moved higher as traders reacted to rising oil and natural gas prices.

The nearest support level for Dow Jones is located in the 47,100 – 47,200 range. If Dow Jones declines below the 47,100 level, it will move towards the next support at recent lows at 46,300 – 46,400.

On the upside, Dow Jones needs to climb above the resistance at 47,900 – 48,000 to have a chance to gain sustainable upside momentum in the near term.

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