NASDAQ Index, SP500, Dow Jones Forecasts – Stocks Pull Back As Oil Gains 9%

SP500 Remains Under Pressure As Oil Prices Rise

SP500 is losing ground as oil markets rally amid war in the Middle East. WTI oil climbed above the $96.00 level, while Brent oil rallied above the $101 level.

Iran’s new Supreme Leader Mojtaba Khamenei delivered hawkish comments and said that Iran would open new fronts against U.S. and Israel. Interestingly, a news anchor read his statement, and Supreme Leader did not appear in public.

Meanwhile, President Trump said that preventing Iran from obtaining nuclear weapons was more important than oil prices.

The Strait of Hormuz remains closed, and oil traders bet that it would not be opened in the near term. UK believes that Iran has already started mining the Strait of Hormuz, although more confirmations are needed.

Markets prepare for a long war and bet on higher oil prices. Not surprisingly, Treasury yields continue to move higher. Fed would not be able to cut rates as rising oil prices will fuel inflation. The yield of 2-year Treasuries moved towards the 3.75% level, while the yield of 10-year Treasuries climbed above 4.25%.

Today, traders also had a chance to take a look at housing market data. Housing Starts increased by +7.2% month-over-month in January, compared to analyst consensus of -2.4%. Building Permits declined by -5.4% on a month-over-month basis, compared to analyst forecast of -2.4%.

Traders also had a chance to take a look at the Initial Jobless Claims report. The report indicated that 213,000 Americans filed for unemployment benefits in a week, compared to analyst forecast of -2.4%.

Energy stocks were among the biggest gainers today as traders focused on the strong rally in the oil markets. Utilities and consumer defensive stocks have managed to gain some ground amid rising demand for safe-haven assets.  Most sectors pulled back in today’s trading session.

Currently, SP500 is trying to settle below the support level at 6710 – 6720. In case this attempt is successful, SP500 will head towards the next support, which is located in the 6640 – 6650 range.

NASDAQ Retreats Amid Falling Demand For Tech Stocks

NASDAQ is losing ground as traders sell tech stocks amid worries about the impact of high oil prices.

Intel, which is down by 5.5%, is among the worst performers in the NASDAQ index today.

From the technical point of view, NASDAQ attempts to settle below the support level at 24,700 – 24,750. If NASDAQ manages to settle below the 24,700 level, it will head towards the next support at 24,350 – 24,400. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.

Dow Jones Pulls Back As Traders Bet On Hawkish Fed

Dow Jones is losing ground amid broad pullback in the equity markets. Most stocks in the Dow Jones index moved lower in today’s trading session.

Chevron, which was up by 3.1%, was the only notable gainer in the index today. The stock continued to move higher as traders focused on the rally in the oil markets.

Dow Jones declined below the support at 47,100 – 47,200 and attempts to settle below the 46,800 level. If Dow Jones manages to settle below 46,800, it will move towards the next support level, which is located in the 46,300 – 46,400 range.

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