NASDAQ Index, SP500, Dow Jones Forecasts – NASDAQ Tests New Highs As Micron Gains 7.8%

The surprising Producer Prices data showed that inflation impact from high energy prices could be lower than previously expected. In theory, it could provide Fed with an opportunity to cut rates, which is bullish for stocks. That said, it’s too early to bet that inflation will cool down soon as physical oil market remains extremely tight.

WTI oil pulled back below the $62.00 level as traders bet that U.S. and Iran could reach a deal soon. The second round of negotiations is expected to take place in Islamabad. Iran did not respond to the naval blockade from the U.S., and many analysts believe that the country is ready for a deal.

Falling oil prices provided significant support to stocks. Most market sectors moved higher in today’s trading session as the appetite for risk increased. Energy stocks found themselves under pressure as traders reacted to the strong sell-off in oil markets.

SP500 settled above the previous resistance level at 6910 – 6920 and is trying to settle above the resistance at 6960 – 6970. In case this attempt is successful, SP500 will move towards the next resistance, which is located in the 7010 – 7020 range. RSI is in the overbought territory, so the risks of a pullback are increasing. It should be noted that short-covering may have served as an important catalyst that triggered the strong rally.