Stock Market News: Nasdaq Dips Back Into Correction Territory
The stock market’s tariff-fueled selloff has sent the S&P 500 below its 200-day moving average for the first time since November 2023, while the Nasdaq Composite is on track to close in correction territory.
The S&P 500 was down 2.2% to 5713.90 on Thursday, which is below the 200 DMA at 5730.65. The Nasdaq Composite was down 3% to 17,993, more than 10% below its recent high and putting it at risk of entering correction territory. The Dow was also down 563 points, or 1.3%.
Wall Street was selling stocks as the Trump administration signaled it plans to move forward on tariffs, even if it plans to delay the import taxes on most goods from Mexico for one month.
The S&P had traded above its 200-day moving average for 334 trading days in a row. That’s its longest stretch since Jan. 21, 2022, according to Dow Jones Market Data. The Nasdaq entered and exited a correction this past August.
“The 200-DMA will matter if/when the S&P 500 breaks below it and then fails to rebound back above it – which is the case for any support or trend line,” Frank Cappelleri, founder of technical analysis firm CappThesis, tells Barron’s. “In other words, one close below the line won’t tell us too much; it’s all about the response.”
BTIG Chief Market Technician Jonathan Krinsky points out that the S&P 500 rallied as much as 2.2% at its high on Wednesday from right around its 200 DMA on Tuesday.
“As is often the case in markets, however, it’s the second mouse that gets the cheese,” Krinsky writes. “With SPX now back to its 200 DMA (5730), that looks to be the case once again. The good news is that markets are starting to show some downside exhaustion signals heading into tomorrow’s key non-farm payroll report.”
If the S&P 500 loses its 200 DMA, Krinsky sees support at 5650, which was a prior resistance from last fall.