Nasdaq Index, Dow Jones, S&P 500 News: Bearish Technical Breakdown Indicates Further Weakness
S&P 500 and Nasdaq Composite Trends
Both the S&P 500 and Nasdaq Composite experienced declines, dropping 1.23% and 1.4% respectively. This downturn followed a surge in crude oil prices and comments by Minneapolis Federal Reserve President Neel Kashkari, who raised concerns over lowering interest rates in the face of persistent inflation.
Rate Cut Speculations and Jobs Report Anticipation
The trading community is closely monitoring the possibility of a rate cut in June, with the CME Group’s Fed Watch tracker indicating an increased likelihood. Meanwhile, the focus shifts to the upcoming jobs report, where economists expect a slowdown in job additions, with an estimate of 200,000 new jobs in March. Wage growth is also a critical factor, anticipated to rise by 0.3%.
Investor Sentiment and Market Reaction
Investor optimism, as measured by the American Association of Individual Investors, has shown a slight decline but remains above the historical average for the 22nd consecutive week. However, this optimism is tempered by caution, with the market reacting sensitively to Federal Reserve actions and data releases. The upcoming payroll report is particularly significant, providing insight into inflationary pressures through wage growth data.
Short-Term Market Forecast
In the short term, the market is expected to experience some consolidation, especially after strong returns in the first quarter. This consolidation phase, while indicative of a potential modest pullback, is seen as a normal fluctuation within an overall upward trend. The focus now is on the balance between cautious optimism among investors and the critical economic data that will shape Federal Reserve policies and market trends.