Key Insights
- ConocoPhillips led the rally in energy stocks after raising the dividend and increasing the buyback.
- Mega cap stocks are moving lower as Treasury yields rise.
- A move below the support at 3725 will push S&P 500 towards the 3690 level.
Big Tech Stocks Remain Under Pressure
S&P 500 rebounded from session lows as traders reacted to the ISM Non-Manufacturing PMI data, which missed analyst expectations.
The rebound from session lows was led by energy stocks, which enjoyed strong support today. ConocoPhillips, APA Corporation, and Marathon Oil were up by 6-7% in today’s trading session. ConocoPhillips gained strong upside momentum after beating analyst estimates, raising the dividend, and increasing its share buyback plan by $20 billion.
Etsy gained 14% despite missing analyst estimates on earnings. The stock moved higher as the company presented an optimistic outlook for the fourth quarter of this year.
Booking was up by 5% after reporting revenue of $6.05 billion and adjusted earnings of $53.03 per share, which exceeded analyst expectations.
Weak guidance put significant pressure on Fidelity National Information Services, which was down by 25% after the release of its quarterly report.
The leading tech stocks like Apple, Alphabet, and Amazon were down by 2-3%. Meanwhile, Meta Platforms tested new lows near $88.50.
The broad market will not be able to gain sustainable upside momentum if the mega cap stocks remain under pressure. Traders remain worried that higher interest rates will hurt the business of leading companies.
While the tech leaders looked invincible during the coronavirus crisis, higher interest rates, stronger dollar, and the slowdown of the world economy put significant pressure on their stocks. Traders should continue to monitor the dynamics of big tech stocks to find clues about the future direction of S&P 500.
S&P 500 Tried To Settle Below The 3700 Level
S&P 500 made an attempt to settle below the support at 3725 but lost momentum and rebounded towards the 3750 level. The nearest resistance for S&P 500 is located at 3760. If S&P 500 climbs above this level, it will head towards the resistance at 3805. A move above 3805 will open the way to the test of the resistance at 3835.
On the support side, S&P 500 needs to settle below the support level at 3725 to have a chance to gain additional downside momentum in the near term. The next support level is located at 3690. In case S&P 500 declines below this level, it will head towards the support at 3650.
For a look at all of today’s economic events, check out our economic calendar.