- US stocks faced pressure as tech leaders underperformed, highlighting cautious market sentiment.
- Retail sales data added to investor caution amid a volatile week.
- Futures hint at a rebound as traders eye key levels in the Nasdaq 100 and S&P 500.
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US stocks stumbled on Thursday as tech heavyweights, including Apple (NASDAQ:AAPL), dragged the market lower. The slide erased some of the strong gains logged the previous day when optimism over easing inflation and robust bank earnings lifted all three major indexes.
The tech-focused Nasdaq 100 led the decline, dropping 0.69%, while the S&P 500 and Dow Jones Industrial Average posted modest losses. The S&P 500’s dip marked the end of its three-day winning streak, underscoring the fragile momentum in the market.
Adding to the mix, December’s retail sales data came in weaker than expected, rising just 0.4% compared to forecasts of a 0.5% increase. Despite Thursday’s losses, futures for all three indexes showed slight gains ahead of Friday’s session, suggesting investors remain cautiously optimistic as the week comes to a close.
Trump’s Inauguration and Earnings Season Set the Stage Next Week
With the inauguration of President-elect Donald Trump just days away, markets are treading water, aligning closely with technical patterns.
Investors are also focused on earnings season, which kicked off with strong results from major financial institutions.
Robust earnings per share and revenue figures have so far exceeded expectations, providing a solid foundation for potential upward moves in the broader market.
However, for the bulls to sustain their charge, tech giants need to step up. Across the Atlantic, European markets are in rally mode, highlighted by the German DAX hitting record highs and nearing the psychological barrier of 21,000 points.
S&P 500: Upper Channel Limits Face a Test
The S&P 500 is also navigating a price channel, with its next move likely determined by whether bulls can defend the upper boundary. If momentum stalls, attention could shift to the 5,730-point support level.
On the other hand, clearing the 6,100-point resistance zone would pave the way for fresh all-time highs, keeping the index on a bullish trajectory.
Nasdaq 100 Testing Support in a Downward Channel
The Nasdaq 100's southward trajectory has locked it within a downward price channel. Thursday’s session saw the index test the channel’s upper boundary, signaling that bears remain in control. For further declines to materialize, sellers must push through the critical support zone near 20,800 points.
Should the index breach this level, the confluence of the channel’s lower boundary and the round 20,000-point mark could act as the next target. Conversely, breaking above 22,000 points would signal a potential reversal and renewed bullish momentum.
DAX: Bulls Hold Firm Amid Record Highs
Germany’s DAX continues to surge, breaking new records as it consolidates above the 20,000-point milestone. Investors eyeing the prevailing trend may find opportunities on pullbacks, with initial support near the 20,000-point area offering an entry point.
If the uptrend holds, the next target is the 21,000-point psychological level. However, a break below the 19,700-point confluence of trendline and support could signal a deeper correction.
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Disclaimer: This article is written for informational purposes only; it does not constitute a solicitation, offer, advice, counseling or recommendation to invest as such it is not intended to incentivize the purchase of assets in any way. I would like to remind you that any type of asset, is evaluated from multiple points of view and is highly risky and therefore, any investment decision and the associated risk remains with the investor.