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S&P 500, Nasdaq 100 Slip on Inflation Jitters as Geopolitical Risk Boosts Oil Prices

S&P 500, Nasdaq 100 Slip on Inflation Jitters as Geopolitical Risk Boosts Oil Prices

Diego Colman, Contributing Strategist
What's on this page


  • S&P 500, Dow Jones, and Nasdaq 100 trade lower as market sentiment sours
  • Oil rallies on geopolitical tensions, sparking fears that rising energy prices will translate to higher inflation and thus aggressive monetary tightening
  • In this article we explore key technical levels for the S&P 500 and Nasdaq 100

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Most read: Dow Jones, Nasdaq 100, S&P 500 Technical Outlook

U.S. stocks were unable maintain momentum and glided downwards on Wednesday, amid war concerns and rising oil prices. At the market close, the S&P 500 slipped 0.63% to 4,602, while the Dow Jones declined 0.19% to 35,228. Meanwhile, the Nasdaq 100 fell 1.1% to 15,071, losing its 200-day simple moving average and reentering correction territory.

During the session, front-month WTI and Brent futures climbed more than 2% on geopolitical tensions after Russia failed to deliver on its promise to reduce military activity in certain cities in Ukraine and allegedly began recruiting mercenaries to strengthen its grip on the Donbass region.

If the military conflict in Eastern Europe does not abate significantly in the coming days and weeks, Western countries will feel more pressure to increase economic sanctions on Moscow. This scenario may further disrupt commodity trade flows and raise energy prices, reinforcing the inflation loop and thus the need to tighten monetary policy aggressively.

With uncertainty on the rise, the equity market will find it difficult to extend its recent rebound until other bullish catalysts emerge that can spark buying interest and fuel the next leg higher. Absent any new positive drivers, price action could begin to consolidate or, at worst, drift lower.

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Stocks sold off on Wednesday as bullish momentum faded on Wall Street. As a result, the Nasdaq 100 failed to follow-through on the topside, pivoting lower and falling below its 200-day simple moving average, a bearish signal. If selling pressure intensifies in the coming days, support rests at 14,901, but a move below this floor could accelerate the decline, exposing the 14,456 zone.

On the upside, for bullish sentiment to improve, the tech index must reclaim its 200-day SMA and move atop 15,345, the 61.8% Fibonacci retracement of the November 2021/March 2022 pullback. If this scenario plays out, the bulls could launch on attack on 15,530.

NDX price chart

Nasdaq 100 (NDX) chart prepared in TradingView

US 500 Bullish
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily -5% 3% 0%
Weekly -9% 10% 3%
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The S&P 500 also traded lower on Wednesday, but managed to remain above the 4,600 psychological level, a key technical support. For near term guidance, it would be important to see how prices behave in the coming days, but if the index fails to the defend the 4,600 floor, sellers could trigger a large sell-off, paving the way for a retest of the 50-day SMA near 4,466.

On the flip side, if dip buyers resurface and the S&P 500 bounces off support, initial resistance appears at 4,635, while on further strength, the next hurdle lies at 4,745.

SPX price chart

S&P 500 (SPX) Chart by TradingView


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---Written by Diego Colman, Market Strategist & Contributor

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