NASDAQ Index, SP500, Dow Jones Forecasts – Stocks Retreat As WTI Oil Tests The $104 Level

SP500 Retreats As WTI Oil Tests New Highs

SP500 pulls back as traders focus on oil price dynamics and worry about a potential ground operation in Iran.

WTI oil climbed towards the $104.00 level as oil traders bet on escalation of the conflict in the Middle East. Rising oil prices put significant pressure on stocks. Interestingly, Brent oil was mostly flat as traders decided to take some profits off the table after an unsuccessful attempt to push Brent oil prices above the $117 level.

President Trump said that U.S. will atack Iranian power plants if the country did not agree to a deal. Iran continues to deny that it is in direct negotiations with the U.S.

Treasury yields moved lower as traders reacted to Fed Chair Powell’s comments. Powell said that Fed could not control the consequences of supply shocks. Bond traders bet that Fed would not raise rates due to rising energy prices. The yield of 2-year Treasuries pulled back towards the 3.82% level, while the yield of 10-year Treasuries settled below 4.35%. It should be noted that falling Treasury yields did not provide support to major indices.

Today, traders had chance to take a look at the Dallas Fed Manufacturing Index report. The report showed that Dallas Fed Manufacturing Index pulled back from 0.2 in February to -0.2 in March, compared to analyst forecast of +0.7. This report did not have a material impact on market dynamics as traders focused on geopolitics, Powell’s comments, and rising oil prices.

Consumer defensive and utilities stocks managed to gain some ground in today’s trading session as demand for safe-haven assets increased. Tech stocks found themselves under strong pressure as the appetite for risk declined.

Currently, SP500 is trying to settle below the support level at 6350 – 6360. In case this attempt is successful, SP500 will move towards the next support, which is located in the 6290 – 6300 range. RSI remains in the moderate territory, so there is plenty of room to gain momentum in the near term.

NASDAQ Is Losing Ground As The Appetite For Risk Declines

NASDAQ is under strong pressure amid pullback in the tech sector. Micron, which is down by 10%, is the worst performer in the NASDAQ index today.

Western Digital and Seagate  have also gained strong downside momentum in today’s trading session.

NASDAQ failed to settle above the resistance at 23,250 – 23,300 and pulled back towards the support at 22,900 – 22,950. If NASDAQ manages to settle below the 22,900 level, it will move towards the next support level, which is located in the 22,600 – 22,650 range. RSI has recently moved into oversold territory, but there is enough room to gain additional downside momentum in case the right catalysts emerge.

Dow Jones Tests Support At 45,200 – 45,300

Dow Jones is mostly flat, supported by rising demand for safe-haven sectors. Solid demand for healthcare, financial, and consumer stocks provided some support to the Dow Jones index today.

From the technical point of view, Dow Jones pulled back from session highs and moved towards the support level at 45,200 – 45,300. If Dow Jones manages to settle below the 45,200 level, it will head towards the next support level at 44,600 – 44,700.

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