NASDAQ Index, SP500, Dow Jones Forecasts – Stocks Test Historic Highs As Traders Bet On Dovish Fed

SP500

SP500 tests historic highs as traders focus on inflation data. Inflation Rate increased from 2.9% in August to 3% in September, compared to analyst forecast of 3.1%. Core Inflation Rate declined from 3.1% to 3.0%, compared to analyst consensus of 3.1%. Treasury yields were mostly unchanged as bond traders reacted to lower-than-expected inflation reports. Today, traders also focused on PMI data. Manufacturing PMI improved from 52.0 in September to 52.2 in October, compared to analyst consensus of 52.0. Services PMI jumped from 54.2 to 55.2, while analysts expected that it would decrease to 53.5. Numbers above 50 show expansion. The strength of the services sector provided significant support to Composite PMI, which increased from 53.9 to 54.8. Traders also had a chance to take a look at the final reading of Michigan Consumer Sentiment report. The report showed that Consumer Sentiment pulled back from 55.1 in September to 53.6 in October, compared to analyst consensus of 55.0. The rally was broad, and most market sectors moved higher in today’s trading session. Consumer defensive stocks found themselves under pressure as demand for safe-haven assets declined. Energy stocks have also moved lower as traders took some profits off the table after the recent rally.

A move above the 6800 level will push SP500 towards the 6850 level. RSI has recently moved into oversold territory, but there is enough room to gain momentum in the near term.

NASDAQ

NASDAQ also tests historic highs amid rising demand for tech stocks. Traders bet that Fed will continue to cut rates as inflation remains under control.

The technical picture is bullish as NASDAQ managed to settle above the resistance at 25,150 – 25,200.

Dow Jones

Dow Jones gained strong upside momentum amid broad rally in the equity markets. IBM, which was up by 8.2%, was the best performer in the Dow Jones index today.

In case Dow Jones stays above the 47,000 level, it will head towards the 47,500 level.

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