Tech Surges, Dow Mixed Amid Market Volatility

On Monday, the S&P 500 and Nasdaq saw slight gains amid a turbulent trading session affected by soft manufacturing data and a temporary halt in trading for numerous equities due to a glitch on the NYSE. Conversely, the Dow closed lower as energy stocks declined due to falling oil prices and concerning manufacturing figures indicating economic deceleration. However, the Dow Jones Industrial Average experienced a significant surge on Friday, marking its strongest session of the year, following a solid month for investors, driven partly by the Federal Reserve's inflation measure meeting expectations.

U.S. stock index futures indicated a mixed start to the trading week, with attention focused on an upcoming employment report that could impact Federal Reserve decisions on potential interest rate adjustments. In May, the Dow Jones Industrial Average rose by 2.4%, the S&P 500 by 4.8%, and the Nasdaq by 6.9%.

Nvidia Corporation, particularly its unveiling of a new line of artificial intelligence processors, significantly boosted technology stocks on Wall Street, with Nvidia's stock surging nearly 5% on Monday and nearing record highs in aftermarket trading. Nvidia announced its latest chip architecture, named "Rubin," slated for shipping in 2026, as it aims to maintain a competitive edge against rivals such as Advanced Micro Devices and Intel. Meanwhile, AMD unveiled its own AI chips, but its stock fell more than 2%.

GameStop Corp experienced a notable surge in its stock price, closing 21% higher on Monday, following revelations from influencer Keith Gill, known as Roaring Kitty, about his substantial investment in the company, reminiscent of the meme stock rally in 2021. Other meme stocks like AMC Entertainment Holdings Inc and Koss Corporation also saw advances, albeit at a slower pace.

Energy stocks experienced a notable decline of over 2%, exerting downward pressure on the broader market, driven by ongoing oil price weakness following OPEC and its allies' decision to extend current production curbs until 2025. However, they also announced plans to gradually phase out some voluntary cuts after the third quarter, raising concerns about a potential supply surplus amidst uncertainties regarding crude demand strength. This move signaled a shift in market support by OPEC+, particularly Saudi Arabia, which analysts noted could pose challenges for 2025. Companies like Halliburton Company, Diamondback Energy Inc, and Baker Hughes Co were among the major decliners in this sector.

Speculation about a Federal Reserve interest rate cut intensified amid recent weak economic indicators, with investors increasingly betting on a rate cut starting in September. The CME Fedwatch tool reflected a 52.5% probability of a 25 basis points rate cut in September, up from 47% previously. May's purchasing managers index data indicated a second consecutive slowdown in manufacturing activity, following a downward revision of U.S. gross domestic product data for the first quarter.

Attention is now focused on upcoming nonfarm payrolls data for May and JOLTS job openings data, both crucial for the Fed's rate decision. Despite this, the central bank is expected to maintain rates during its next meeting.

Data for Technical Analysis (30Min) CFD US 500 [S&P 500]

Resistance : 5280.2, 5281.8, 5282.7

Support : 5288.4, 5286.8, 5285.9                     

30Min Outlook

Source: TradingView                                                            

Buy/Long 1 If the support at the price range 5285.4 - 5288.4 is touched, but the support at 5288.4 cannot be broken, the TP may be set around 5286.2 and the SL around 5284.0, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 5280.2 - 5283.2, TP may be set around 5288.0 and SL around 5281.2, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 5280.2 - 5283.2 is touched, but the resistance at 5280.2 cannot be broken, the TP may be set around 5282.1 and the SL around 5284.7, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 5285.4 - 5288.4, TP may be set around 5280.0 and SL around 5287.4, or up to the risk appetite.       

Pivot Points Jun 4, 2024 03:36AM GMT

Sources: Investing 1, Investing 2