Skip to content
News & Analysis at your fingertips.

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. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
S&P 500, Nasdaq 100 Post Modest Gains Following Tumultuous Tuesday

S&P 500, Nasdaq 100 Post Modest Gains Following Tumultuous Tuesday

Brendan Fagan, Contributor

S&P 500, Nasdaq 100 - Talking Points

  • S&P 500 bounces slightly but stalls below key resistance
  • Nasdaq 100 outperforms as bulls defend 12100
  • Traders digest the possibility of a 100 basis point hike next week
Equities Forecast
Equities Forecast
Recommended by Brendan Fagan
Get Your Free Equities Forecast
Get My Guide

Equities are posting a modest rebound from Tuesday’s decapitation, with the Nasdaq 100 leading US benchmarks higher. Equities posted their worst day on the year Tuesday following a hotter-than-expected CPI print. In fact, Tuesday’s session was the worst for all three major benchmarks since June 2020.

As a result of yesterday’s CPI print, market expectations for next week’s FOMC meeting have changed dramatically. The prospect of a 50 basis point (bps) hike has effectively disappeared, as traders have instead started to focus on the possibility of the Fed raising by a whopping 100 bps. Treasury yields soared due to this “recalibration” on Tuesday, with the 2-year Treasury yield jumping by as much as 22 basis points. That advance has cooled today, with the 2-year up by just 2 bps.

Nasdaq 100 futures (NQ) are perky following the opening bell despite some choppy conditions. Price gyrated significantly following this morning’s PPI release, as bulls successfully defended multiple attacks on the 12100 area. Price has since bounced firmly above 12200, as traders come to grips with revised expectations for Federal Reserve tightening. The jump in US Treasury yields yesterday hammered high multiple stocks, and further increases across the yield curve into next week’s FOMC meeting could continue to weigh on NQ. As long as support near 12100 holds, bulls may remain in control and we may continue to retrace Tuesday’s decline.

Nasdaq 100 Futures 1 Hour Chart

image1.png

Chart created with TradingView

Unlike NQ, S&P 500 futures (ES) were able to break the Tuesday lows following PPI. Just as was the case in the final hour of trade yesterday, the slip into the 3940 range was bought up. Price remains penned in by fib resistance at 3983, which is the 50% retracement of the advance off the June lows. Failure here may open the door to further weakness into next week’s FOMC, as traders question the possibility of a full 100 basis point hike. I would look to the 3900 area for support should additional weakness materialize, which is the 38.2% retrace of that same advance off the June lows.

S&P 500 Futures 1 Hour Chart

image2.png

Chart created with TradingView

Trade Smarter - Sign up for the DailyFX Newsletter

Receive timely and compelling market commentary from the DailyFX team

Subscribe to Newsletter

Resources for Forex Traders

Whether you are a new or experienced trader, we have several resources available to help you; indicator for trackingtrader sentiment, quarterlytrading forecasts, analytical and educationalwebinarsheld daily,trading guidesto help you improve trading performance, and one specifically for those who arenew to forex.

--- Written by Brendan Fagan

To contact Brendan, use the comments section below or@BrendanFaganFXon Twitter

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

DISCLOSURES