SP500 gains some ground as traders react to the economic reports and prepare for tomorrow’s Non Farm Payrolls report. Initial Jobless Claims report showed that 228,000 Americans filed for unemployment benefits in a week. Personal Income grew by 0.2% month-over-month in July, while Personal Spending increased by 0.8%. PCE Price Index, which is the Fed’s preferred measure of inflation, increased from 3% in June to 3.3% in July, in line with the analyst consensus. FedWatch Tool indicates that there is a 52.7% probability that Fed will leave the federal funds rate unchanged by the end of the year. Treasury yields are moving lower as bond traders bet that Fed will not raise rates due to the emerging slowdown in the labor market and problems in the manufacturing sector. At this point, the Fed policy outlook is the main driver for stocks, so major indices are moving higher on expectations of a less hawkish Fed.
SP500 has settled above the 200 MA and continues to move higher. A move above the 4535 level will open the way to the test of the resistance at 4575 – 4600.
NASDAQ gains ground as demand for tech stocks stays strong. Chip stocks are among the best performers in the NASDAQ index today, and it looks that traders stay focused on the AI hype.
RSI is in the overbought territory, so the risks of a pullback are increasing. However, there is enough room to gain additional momentum. In case NASDAQ climbs above the 15,600 level, it will head towards the resistance at 15,900 – 16,000.
Dow Jones pulls back as demand is concentrated in tech stocks. Traders take some profits off the table after the strong rebound from recent lows.
From the technical point of view, Dow Jones faced resistance in the 35,000 – 35,100 range and pulled back towards the 34,800 level. A move below 34,800 will open the way to the test of the support at 34,500 – 34,600.
For a look at all of today’s economic events, check out our economic calendar.