S&P 500 and Nasdaq 100 Push Higher as Risk Sentiment Continues its Recovery
S&P 500 and Nasdaq 100 Push Higher as Risk Sentiment Continues its Recovery
By:Diego Colman
US STOCKS OUTLOOK:
- The S&P 500 gains and rises for third consecutive day
- The Nasdaq 100 rallies 1.58% and reaches its highest level since February 10
- Despite improving market sentiment, the outlook remains highly uncertain for equities
Most read: US Bond Yields Biased Higher on Hawkish Fed, SHY at Risk of Further Losses
U.S. stocks struggled to find direction and swung between small gains and losses for most of the day on Monday, but picked up momentum in late trading to end the day sharply higher. At the market close, the S&P 500 rose 0.71% to 4,575, climbing for the third day in a row, boosted by a strong rally in Tesla shares, which soared 8% after the company said it will seek shareholder approval to split its stock to pay dividends.
For its part, the cyclically oriented Dow Jones clambered 0.27% to finish the session near the 34,955 zone, after a stretch of the Treasury curve inverted, with 5s30s spread falling briefly to -2 bps, the first negative reading since March 2006. Meanwhile, the Nasdaq 100 outperformed its peers, rallying 1.58% to 14,987, its best level since February 10, as a deep sell-off in oil induced by China's new lockdown eased some concerns about soaring consumer prices.
With the VIX in correction mode and hugging the 20-handle, sentiment appears to be on the mend after so much pessimism earlier this month, but the improved mood may not last long amid tighter monetary policy, red-hot inflation, weakening economic activity and rising geopolitical risks.
As the first quarter comes to an end, Corporate America will soon begin releasing revised profit forecasts ahead of the start of the new earnings season. It is too early to draw broad conclusions, but preliminary data compiled by FactSet indicates that S&P 500 companies are issuing negative EPS guidance at the highest rate since the fourth quarter of 2019, with most of the downgrades concentrated in the industrials and information technology sector so far. If this trend consolidates in the coming days and weeks, stocks will struggle to push higher and to build on the recovery seen over the past couple of weeks.
S&P 500 TECHNICAL ANALYSIS
The S&P 500 broke above Fibonacci resistance at 4,550 and now appears to be headed for the 4,600 area after Monday's rally. If bulls manage to clear this barrier decisively in the coming days, the index could be on its way to recapture the 4,750 level. On the flip side, if bullish momentum wanes and sellers return, the first support to consider appears at 4,550, followed by 200-day simple moving average near 4,466. On further weakness, the next floor rests at 4,420.
S&P 500 (SPX) chart by TradingView
NASDAQ 100 TECHNICAL ANALYSIS
The Nasdaq 100 climbed above the 50% Fibonacci retracement of the November 2021/March 2022 decline on Monday, a bullish signal for price action. If this breakout is sustained, the tech benchmark could find the impetus to challenge its 200-day SMA near 15,130 in the coming days. If price manages to venture atop this resistance, 15,345 will become the next upside focus.On the other hand, if the Nasdaq 100 pivots lower, technical supports sits at 14,901, but if this area fails to hold, there is scope for a pullback towards 14,456.
Nasdaq 100 (NDX) chart by TradingView
EDUCATION TOOLS FOR TRADERS
- Are you just getting started? Download the beginners’ guide for FX traders
- Would you like to know more about your trading personality? Take the DailyFX quiz and find out
- IG's client positioning data provides valuable information on market sentiment. Get your free guide on how to use this powerful trading indicator here.
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.