US STOCKS: S&P 500, NASDAQ NEWS AND ANALYSIS
Great news for the equity market! US regulators have successfully handled the sale of Silicon Valley Bank to First Community Bank, easing concerns about potential stress in the mid-sized banking sector. Even better, reports suggest that the White House is considering stricter rules for regional banks with assets between $100 billion and $250 billion. These regulations are aimed at reinstating previous rules that were reversed by former President Donald Trump. The details are still being worked out, but we can expect improved stress testing and greater liquidity coverage ratios to be implemented soon.
It looks like US equities are expected to start off on a positive note today based on some technical factors.
The tech-heavy Nasdaq has been leading the way among US indices lately. This is thanks to big names like Microsoft, Alphabet, and Meta, which are expected to rise between 0.8% and 1.5% in the premarket. That means the index is likely to open on a positive note at 09:30 ET.
The anticipation of interest rate reductions in the United States during the latter half of the year has caused a noticeable upturn in technology stocks and, consequently, the Nasdaq index. Specifically, the Nasdaq has reached a new peak for the year, whereas the S&P 500 and Dow Jones indices, which are more diversified, have not exhibited such a level of optimistic sentiment.
The Nasdaq, via the E-Mini Futures contract, is anticipated to undergo another examination of its preceding peak at roughly 12,950 points, and conceivably even the annual high of 13,082 points. Nevertheless, the likelihood of such a development is heavily contingent upon whether further reports of regional bank instability emerge on screens within the upcoming week. Conversely, those who hold a negative outlook on the Nasdaq will undeniably be monitoring the negative divergence that has manifested itself as the index attained a higher high while the RSI failed to do so. Such an observation may impede a sustained upward movement, especially given the presence of relatively long upper wicks that could signal reluctance toward higher valuations.
Nasdaq 100 E-Mini Futures Daily Chart
The daily chart of the E-Mini Futures reveals a significant upward movement for the S&P 500 prior to market opening. The index has been hovering around the psychologically important 4000 level, with sentiment fluctuating. Recent trends indicate an improvement in sentiment, but it should be noted that there is a possibility of increased volatility based on previous price movements. Resistance levels can be seen at 4110, followed by the range of 4160-4180. When evaluating the potential for sustained selling, the crucial level to consider is 3900. However, a better indicator may be the support zone around 3800.