Nasdaq 100, S&P 500 Remain Under Pressure In Wake of US CPI Report
Nasdaq 100, S&P 500 Remain Under Pressure In Wake of US CPI Report
Equities continue to push lower in the wake of yesterday’s CPI report, with the S&P 500 and Nasdaq 100 erasing gains from early in the NY session. Risk has been under significant pressure of late, as a plethora of macro concerns weigh on investor sentiment. Wednesday’s session was particularly interesting, as there were violent swings following the release of the highly anticipated CPI data, with stocks ultimately cascading lower throughout the day. Markets may be at a crossroads, as Wednesday’s data did little to answer any questions about “peak inflation.”
For starters, the CPI print is just a single data point. Market participants and Fed officials will need more data to see if inflation is truly rolling over. However, despite the print exceeding expectations on both YoY and MoM metrics, CPI was lower in April than it was in March. Perhaps we can sum up yesterday’s data set as a mixed bag. Risk may largely reflect that sentiment, as the S&P 500 teeters on the verge of a bear market.
Trade Smarter - Sign up for the DailyFX Newsletter
Receive timely and compelling market commentary from the DailyFX team
With so many tech stocks getting kneecapped by the recent rise in interest rates, the Nasdaq 100 continues to suffer severe pain. Thursday’s session saw the index trade below 12000 for the first time since November 2020. More pain may be in store as equity markets have yet to show a sign of true capitulation. That being said, NQ did rally this morning to previous support at 12129. That rally was faded heavily, a true sign of the ‘sell the rally” environment we find ourselves in. Bulls will want to see the session low of 11693.25 hold, but a break could see a flush to fresh yearly-lows.
NASDAQ 100 FUTURES (NQ) 1 HOUR CHART
Chart created with TradingView
The S&P 500 has also received a significant gut check of late, as the large weightings of tech within the index continue to drag the benchmark lower. To put those weights into context, Apple alone constitutes roughly 6% of the index, while the entire energy sector represents 4%. Just like NQ, the S&P 500 failed yet again at prior support, that level being 3960. As all risk continues to look extremely heavy, the S&P 500 may find itself slipping closer to a key area around 3800. 3802 represents the 0.618 Fibonacci retracement of the move from the March 2020 bottom to all-time highs. Investors may be looking to put some dry powder to work in that zone, but should that area fail too, we may be in store for some serious pain.
S&P 500 FUTURES (ES) 1 HOUR CHART
Chart created with TradingView
Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.
tastylive content is created, produced, and provided solely by tastylive, Inc. (“tastylive”) and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, digital asset, other product, transaction, or investment strategy is suitable for any person. Trading securities, futures products, and digital assets involve risk and may result in a loss greater than the original amount invested. tastylive, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. Investment information provided may not be appropriate for all investors and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. tastylive is not in the business of transacting securities trades, nor does it direct client commodity accounts or give commodity trading advice tailored to any particular client’s situation or investment objectives. Supporting documentation for any claims (including claims made on behalf of options programs), comparisons, statistics, or other technical data, if applicable, will be supplied upon request. tastylive is not a licensed financial adviser, registered investment adviser, or a registered broker-dealer. Options, futures, and futures options are not suitable for all investors. Prior to trading securities, options, futures, or futures options, please read the applicable risk disclosures, including, but not limited to, the Characteristics and Risks of Standardized Options Disclosure and the Futures and Exchange-Traded Options Risk Disclosure found on tastytrade.com/disclosures.
tastytrade, Inc. ("tastytrade”) is a registered broker-dealer and member of FINRA, NFA, and SIPC. tastytrade was previously known as tastyworks, Inc. (“tastyworks”). tastytrade offers self-directed brokerage accounts to its customers. tastytrade does not give financial or trading advice, nor does it make investment recommendations. You alone are responsible for making your investment and trading decisions and for evaluating the merits and risks associated with the use of tastytrade’s systems, services or products. tastytrade is a wholly-owned subsidiary of tastylive, Inc.
tastytrade has entered into a Marketing Agreement with tastylive (“Marketing Agent”) whereby tastytrade pays compensation to Marketing Agent to recommend tastytrade’s brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastytrade. tastytrade and Marketing Agent are separate entities with their own products and services. tastylive is the parent company of tastytrade.
tastycrypto is provided solely by tasty Software Solutions, LLC. tasty Software Solutions, LLC is a separate but affiliate company of tastylive, Inc. Neither tastylive nor any of its affiliates are responsible for the products or services provided by tasty Software Solutions, LLC. Cryptocurrency trading is not suitable for all investors due to the number of risks involved. The value of any cryptocurrency, including digital assets pegged to fiat currency, commodities, or any other asset, may go to zero.
© copyright 2013 - 2024 tastylive, Inc. All Rights Reserved. Applicable portions of the Terms of Use on tastylive.com apply. Reproduction, adaptation, distribution, public display, exhibition for profit, or storage in any electronic storage media in whole or in part is prohibited under penalty of law, provided that you may download tastylive’s podcasts as necessary to view for personal use. tastylive was previously known as tastytrade, Inc. tastylive is a trademark/servicemark owned by tastylive, Inc.