NASDAQ Index, SP500, Dow Jones Forecasts – Stocks Rally On Rate Cut Bets

SP500

SP500 rallied as traders focused on dovish comments from Fed Chair Powell, who higlighted risks for the labor market. He noted that those risks could lead to higher layoffs and rising unemployment. Put simply, Powell signaled that Fed will cut rates at the next meeting in September. Treasury yields moved lower as bond traders bet on dovish Fed. The yield of 2-year Treasuries declined below the 2.70% level, while the yield of 10-year Treasuries pulled back towards 4.26%. Most market sectors gained ground in today’s trading session. Consumer defensive stocks moved lower as demand for safe-haven assets declined.

The nearest resistance level for SP500 is located in the 6480 – 6490 range. In case SP500 manages to settle above the 6490 level, it will head towards the 6550 level. RSI is close to the overbought territory, but there is enough room to gain additional upside momentum in the near term.

NASDAQ

NASDAQ rallied as traders reacted to Powell’s speech. Intel, which was up by 7%, was the biggest gainer in the NASDAQ index today. The stock gained ground as President Trump said that the U.S. will take a 10% stake in the company.

NASDAQ moved above the resistance at 23,450 – 23,500 and is trying to settle above the 50 MA at 23,566. If this attempt is successful, NASDAQ will head towards the next resistance at 23,900 – 23,950.

Dow Jones

Dow Jones soared towards the 45,700 level amid broad rally in the equity markets. Caterpillar, which was up by 4.3%, was the biggest gainer in the Dow Jones index today.

A successful test of the resistance at 45,700 – 45,800 will push Dow Jones towards the 46,000 level. Traders should noted that RSI is in the overbought territory, so the risks of a pullback are increasing.

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