We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
Oil - US Crude
Wall Street
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • Coming up at half past the hour: my weekly webinar on market #sentiment. Do join me if you can. You can sign up here: https://www.dailyfx.com/webinars/181540619?ref-author=essex&CHID=9&QPID=917711
  • Indices Update: As of 10:00, these are your best and worst performers based on the London trading schedule: France 40: 1.67% Wall Street: 0.90% Germany 30: 0.89% US 500: 0.65% FTSE 100: -0.11% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/5LHY5FmIF9
  • Missed today's #AUDUSD weekly outlook webinar? See the recording here - https://t.co/I6VTWPtUwc
  • Canadian Dollar Forecast: USD/CAD Price- Ready to Edge Lower? More details in the link: https://www.dailyfx.com/forex/technical/home/analysis/usd-cad/2020/05/26/Canadian-Dollar-Forecast-USDCAD-Price-Ready-to-Edge-Lower-MK.html?CHID=9&QPID=917714 https://t.co/eTYFyolGbV
  • Vaccine hopes, a Franco-German recovery package proposal, and a Fed that is committed to provide further liquidity has taken some of the shine off the safe-haven US Dollar.Get your market update from @JMcQueenFX here:https://t.co/GeN07sifc0 https://t.co/r8RTJC8bBG
  • Join @MartinSEssex 's #webinar at 6:30 AM ET/10:30 AM GMT to learn more about trading #sentiment Register here: https://t.co/XUUPRdY06p https://t.co/3XSyQQShxq
  • Silver has been beaten handily by gold in the rush to haven assets inspired by the contagion. However, the gold/silver ratio was rising steadily before this crisis and will probably continue to do so. Get your #silver market update from @DavidCottleFX here:https://t.co/00DiZn6XZS https://t.co/rpZihwpSS1
  • Gold Prices Echo US Dollar Drop as Market Mood Improves - https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/commodities/2020/05/26/Gold-Prices-Echo-US-Dollar-Drop-as-Market-Mood-Improves.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Spivak&utm_campaign=twr #gold #xauusd #CrudeOil #OOTT
  • EU ready to drop maximalist approach to fisheries negotiations with the UK in the next round of Brexit talks (June 1st-5th), according to sources
  • USDMXN leaning on 50% Fib retracement - lower highs and lower lows still dominant. #usdmxn #mexicanpeso @DailyFXTeam https://t.co/GzYTHx7trp
Dow Jones, Nasdaq 100, S&P 500 Forecast: Is the Rally Unfounded?

Dow Jones, Nasdaq 100, S&P 500 Forecast: Is the Rally Unfounded?

2020-05-12 17:15:00
Peter Hanks, Analyst

Dow Jones, Nasdaq 100, S&P 500 Price Outlook:

Dow Jones, Nasdaq 100, S&P 500 Forecast: Is the Rally Unfounded?

The United States stock market has enjoyed a strong recovery from the initial shock of the coronavirus outbreak. In this rebound, the Dow Jones, Nasdaq 100 and S&P 500 have each reclaimed notable price points and technical levels, but one sector has climbed head and shoulders above the rest. This dynamic is easily visible in the performance of the Nasdaq 100 compared to the Dow Jones as the technology industry leads the charge higher.

Ratio of S&P 500 Technology Sector to S&P 500 Industrials Sector

Dow Jones and Nasdaq Price Chart

Chart created in TradingView

The phenomenon is also visible in the ratio of the S&P technology sector to the S&P 500 industrials sector shown above. While technology growth has been outpacing industrials for some time, the divergence between the two really gains pace in March, which directly coincides with the steepest declines experienced by the Dow Jones and Nasdaq 100.

Equities Forecast
Equities Forecast
Recommended by Peter Hanks
Get Your Free Equities Forecast
Get My Guide

So, while the relative performance of the two sectors is nothing new, can one sector singlehandedly drag the broader indices higher indefinitely? Or will the rally begin to sputter out on fears of weakness in the underlying economy – despite tech strength?

Nasdaq and Dow Jones price chart and coronavirus

Chart created in TradingView

Unfortunately, these questions are exceedingly difficult to answer, but we can make the claim the underlying economy and many industries are likely far weaker than what the S&P 500 is displaying. As a counterpoint, many analysts would be quick to argue “the stock market is not the economy,” but surely a vast majority would concede it is heavily based on economic productivity.

Starts in:
Live now:
May 27
( 15:05 GMT )
Recommended by Peter Hanks
Weekly Stock Market Outlook
Register for webinar
Join now
Webinar has ended

Therefore, the recent slowdown in the rebound rally could suggest market participants are becoming a bit more apprehensive on a continuation higher without a larger economic follow-through. Since some cities and states have begun easing quarantine restrictions, economic contraction may begin to ease, but the data that would reflect such an easing has not yet revealed the depths we reached at the height of lockdown.

Thus, investors will not have insight on the pace of economic recovery for a while longer so there exists the possibility that sentiment is damaged when the data is released and the economic carnage is revealed in full. Alongside a Dow Jones struggling with technical resistance, one could begin to argue the Dow Jones and S&P 500 may be due for a leg lower in the coming weeks, while the Nasdaq 100 clings to the relative strength in technology stocks. In the interim, follow @PeterHanksFX on Twitter for updates.

--Written by Peter Hanks, Analyst for DailyFX.com

Contact and follow Peter on Twitter @PeterHanksFX


DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.


News & Analysis at your fingertips.