Nasdaq Tests New Highs as AI Stocks Rally, S&P 500 Stalls and Dow Pulls Back

What to Know

• The S&P 500 traded mostly flat as market participants watched President Trump’s comments on Iran and awaited a Trump and Xi summit.
• President Trump said U.S. officials met with Iranian officials for three hours and that another meeting was planned in the near term.
• Oil prices pulled back as traders weighed the possibility of renewed U.S. and Iran negotiations, offering some support to the S&P 500.
• Treasury yields moved higher, with the 2-year yield climbing above 4.75% and the 10-year yield settling above 4.96%.
• Basic materials stocks gained as copper prices rose, while consumer defensive stocks attracted demand near all-time high levels.
• The Nasdaq moved higher as traders continued to buy AI-related stocks, with Sandisk gaining 7%.
• The Nasdaq is testing resistance at 30,750 to 30,800, while RSI remains in overbought territory.
• The Dow Jones pulled back below the 52,000 level as Cisco fell 5% and financial names such as JPMorgan and American Express lagged.
• The Dow settled below its 50 MA at 52,056 and tested support in the 51,600 to 51,700 area.

U.S. Indices Trade Mixed as Geopolitics, Yields and AI Demand Collide

U.S. equity markets delivered a split performance as traders balanced geopolitical headlines, higher Treasury yields and continued enthusiasm for artificial intelligence-linked stocks. The S&P 500 swung between gains and losses, the Nasdaq pushed higher on strong demand for AI-related names, and the Dow Jones moved lower as weakness in several blue-chip components weighed on the index.

The session reflected a market that remains willing to reward growth themes but increasingly selective as major benchmarks trade near elevated levels. Investors continue to watch whether momentum in technology can offset pressure from rising yields and softness in cyclical pockets of the market. That tension was visible across sectors, with basic materials and consumer defensive shares finding buyers, while financial and energy stocks came under pressure.

S&P 500 Holds Near Flat Line as Traders Monitor Trump’s Iran Comments

The S&P 500 was mostly flat as market participants focused on President Trump’s comments regarding Iran and looked ahead to a Trump and Xi summit. Trump said U.S. officials had met with Iranian officials for three hours and added that another meeting was planned in the near term. The comments came after he had earlier threatened to destroy Iran if the country did not agree to a deal.

Oil prices pulled back as oil traders bet that Washington and Tehran could restart negotiations. Lower oil prices can provide some support to broad equity sentiment because they may ease cost pressure for consumers and companies. In this session, that dynamic helped the S&P 500 avoid a more decisive pullback, although the index still struggled to build a sustained rally.

The move in Treasury yields complicated the picture. Despite the decline in oil prices, yields moved higher. The yield on 2-year Treasuries climbed above the 4.75% level, while the yield on 10-year Treasuries settled above 4.96%. Higher yields can pressure equity valuations, particularly when major indices are already near record territory, because investors demand stronger earnings growth to justify elevated stock prices.

Sector Rotation Supports Some Areas While Financials and Energy Lag

Basic materials stocks were among the strongest performers as traders focused on rising copper prices. Copper often draws attention as a barometer of industrial demand because it is widely used in construction, infrastructure, electrical systems and manufacturing. A firm copper market can therefore improve sentiment toward companies tied to materials production and industrial supply chains.

Consumer defensive stocks also gained upside momentum as some traders appeared willing to increase exposure to defensive sectors near all-time high levels. Defensive groups can attract demand when investors want to stay invested in equities while reducing sensitivity to economic or market volatility. These companies are often tied to products and services that consumers continue to purchase regardless of broader market conditions.

Financial and energy stocks found themselves under pressure. For energy shares, the pullback in oil prices was a direct headwind. For financials, the message was more mixed, as higher yields can help some parts of the sector while also raising concerns about borrowing costs, credit demand and broader risk appetite. The overall sector picture showed a market rotating rather than moving uniformly in one direction.

S&P 500 Technical Levels Put 7,780 in Focus

Technical traders are watching whether the S&P 500 can settle above the 7,780 level. If the index manages to establish itself above that area, attention may shift toward the nearest resistance zone at 7,815 to 7,825. A move above 7,825 would point toward the 7,850 level as the next upside target for chart watchers.

On the downside, a move below 7,750 would risk a test of support at 7,720 to 7,730. If the S&P 500 falls below 7,730, the index could head toward the 50 MA at 7,657. That level may be important for short-term traders because moving averages often act as reference points for momentum, trend strength and potential dip-buying activity.

Nasdaq Tests New Highs as AI Stocks Stay in Demand

The Nasdaq moved higher and tested new highs as traders remained bullish on AI-related stocks. The strongest theme in the index remained demand for companies linked to artificial intelligence infrastructure, data processing and memory. Sandisk was among the biggest gainers in the Nasdaq, advancing 7% as traders continued to bet that demand for memory would keep expanding at a robust pace.

The AI trade remains one of the most important forces in U.S. equity markets. Investors have continued to look for companies that may benefit from larger workloads, expanded data center needs and rising demand for high-performance computing. While enthusiasm remains strong, the rally also raises questions about valuation, positioning and whether short-term price action has become stretched.

That concern is visible in the technical setup. The Nasdaq is trying to settle above resistance at 30,750 to 30,800. If the index can settle above 30,800, it may move toward 31,000. A move above 31,000 would open the way to a test of 31,500. However, RSI remains in overbought territory, which means the risk of a pullback is rising even as momentum remains favorable.

On the support side, a move below 30,500 would push the Nasdaq toward the nearest support area at 30,200 to 30,250. For short-term traders, that zone may determine whether any pullback is treated as a normal pause inside an uptrend or the beginning of a deeper consolidation.

Dow Jones Weakens as Cisco Drops and Yields Bite

The Dow Jones moved lower as Cisco shares fell 5%. JPMorgan and American Express were also among the biggest losers in the index, adding to downside pressure. Unlike the Nasdaq, which benefited from AI demand, the Dow appeared more vulnerable to rising Treasury yields and weakness in specific heavyweight components.

Interestingly, the pullback in oil markets did not provide notable support to the Dow Jones. The index looked more sensitive to higher Treasury yields than the S&P 500 and Nasdaq. That sensitivity may reflect the composition of the Dow and its exposure to mature companies whose valuations and earnings expectations can be more directly affected by changes in financing conditions and macro uncertainty.

From a technical perspective, the Dow settled below the 50 MA at 52,056 and attempted to settle below the support zone at 51,600 to 51,700. If the index settles below 51,600, it may head toward the next support area near recent lows at 51,100 to 51,200. RSI is in moderate territory, which leaves room for additional downside momentum if the right catalysts emerge.

Market Outlook: Momentum Remains Narrow but Resilient

The broader market remains resilient, but the latest action highlights a narrow leadership structure. The Nasdaq continues to benefit from AI-related buying, while the S&P 500 is receiving help from select sectors and lower oil prices. The Dow Jones, however, is showing signs of vulnerability as blue-chip weakness and rising yields create pressure.

For investors, the key question is whether AI strength can continue to pull the broader market higher or whether elevated yields will limit upside in major indices. Geopolitical developments involving Iran and upcoming high-level diplomacy involving Trump and Xi may also shape sentiment. Until the market receives clearer signals, traders may continue to rotate between growth, defensive and materials-linked sectors while watching key technical levels closely.

Frequently Asked Questions (FAQs)

Why did the Nasdaq move higher?

The Nasdaq moved higher because traders continued to buy AI-related stocks. Sandisk was a notable gainer, rising 7% as market participants bet that demand for memory would remain strong.

Why was the S&P 500 mostly flat?

The S&P 500 traded near the flat line as investors weighed President Trump’s comments on Iran, a possible restart of U.S. and Iran negotiations, lower oil prices and higher Treasury yields.

What Treasury yield levels mattered in the session?

The yield on 2-year Treasuries climbed above 4.75%, while the yield on 10-year Treasuries settled above 4.96%. Higher yields created a headwind for equities.

Which sectors supported the S&P 500?

Basic materials stocks were among the biggest gainers as copper prices rose. Consumer defensive stocks also gained as some traders increased exposure to defensive sectors near all-time high levels.

What are the key S&P 500 resistance levels?

Technical traders are watching 7,780 as an important level. If the S&P 500 settles above it, resistance sits at 7,815 to 7,825, followed by the 7,850 level.

What are the key Nasdaq levels?

The Nasdaq is testing resistance at 30,750 to 30,800. A move above 30,800 may point toward 31,000, while a move above 31,000 could open the way to 31,500.

Why did the Dow Jones fall?

The Dow Jones pulled back as Cisco fell 5%, while JPMorgan and American Express also lagged. The index also appeared sensitive to rising Treasury yields.

What Dow Jones support levels are traders watching?

The Dow tested support at 51,600 to 51,700 after settling below its 50 MA at 52,056. A move below 51,600 could point toward 51,100 to 51,200.

Is the Nasdaq rally risk-free?

No. Although momentum remains strong, RSI is in overbought territory, so the risk of a pullback is rising if buyers lose momentum or yields continue to climb.