NASDAQ, S&P 500, Dow Jones Analysis – Stocks Retreat As Treasury Yields Test Multi-Week Highs

Key Insights

• The pullback continues as traders stay focused on rising Treasury yields. 
• NASDAQ underperforms as traders sell yield-sensitive tech stocks. 
• Dow Jones consolidates near the 34,000 level. 

S&P 500

S&P 500 remains under pressure as Treasury yields keep moving higher. The yield of 10-year Treasuries has recently managed to settle above the 50 EMA at 3.59% and is trying to climb above the 3.65% level.

Traders stay focused on the recent Non Farm Payrolls report, which showed that the job market remained in a decent shape despite recession worries. Traders have started to price in a more aggressive Fed, which was bearish for stocks.

Not surprisingly, the yield-sensitive real estate and tech stocks are among the biggest losers in today’s trading session. The pullback is broad, and all market segments are moving lower. Consumer Defensive stocks outperform as traders are trying to find safe-haven assets.

NASDAQ

NASDAQ declined below the 12,500 level as traders continued to take profits after the recent strong rally.

Leading tech stocks like Apple, Microsoft, and Alphabet are down by 1-2% in today’s trading session, which is bearish for NASDAQ.

RSI has recently moved out of the oversold territory, but it remains to be seen whether traders are ready to increase purchases of tech stocks when Treasury yields are rising at a robust pace.

Dow Jones

Dow Jones rebounded from session lows. Intel, which is down by 4%, is the worst performer among Dow Jones components today, while Caterpillar showed biggest gains.

From a big picture point of view, Dow Jones consolidates near the 34,000 level. The index failed to test new highs during the recent rebound as traders focused on tech stocks. Today, Dow Jones outperforms as it is less sensitive to the changes in Treasury yields.

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