NASDAQ Index, SP500, Dow Jones Forecasts – Stocks Pull Back As Traders Focus On Fed After Strong PMI Data

SP500

SP500 pulls back as traders react to strong PMI reports. Manufacturing PMI increased from 49.8 in July to 53.3 in August, compared to analyst forecast of 49.5. Numbers above 50 show expansion. Services PMI declined from 55.7 to 55.4, while analysts expected that it would drop to 54.2. The strong performance of the manufacturing sector, which moved back into expansion territory, provided significant support to Composite PMI. The report indicated that Composite PMI improved from 55.1 to 55.4, compared to analyst consensus of 53. The encouraging reports had a negative impact on SP500 as traders reduced bets on dovish Fed. Treasury yields moved higher as traders bet that Fed may decide to keep rates unchanged due to strength of the U.S. economy. Energy stocks were among the biggest gainers today as traders focused on rising oil and natural gas markets. The pullback was led by consumer defensive stocks, which found themselves under pressure as traders reacted to earnings reports.

The nearest support level for SP500 is located in the 6340 – 6350 range. A successful test of this level will push SP500 towards the next support at 6280 – 6290.

NASDAQ

NASDAQ remains under pressure as traders continue to sell tech stocks amid worries about hawkish Fed.

A move below the 23,100 level will push NASDAQ towards the nearest support level at 22,950 – 23,000.

Dow Jones

Dow Jones is losing ground as traders focus on the strong sell-off in Walmart stock. Walmart is down by 5% as traders focus on the weaker-than-expected earnings report.

From the technical point of view, Dow Jones found support in the 44,500 – 44,600 range. In case Dow Jones manages to settle above the 50 MA at 44,758, it will head towards the nearest resistance, which is located in the 45,000 – 45,100 range.

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