Stock Market Forecast Today | S&P 500 & NASDAQ 100 Outlook

The US stock markets showed signs of negativity in premarket trading on Tuesday, which does make a certain amount of sense considering everything that is going on at the same time. The stock market has been very strong since its turnaround in April, and sooner or later there will have to be a bit of a pullback. While we do not know at this point whether or not that pullback is now, it certainly looks as if there is a little bit of a “wobble” in store for the market.

Economic Landscape

The economic landscape is a bit touchy at the moment, as the Federal Reserve is expected to cut rates in September. Quite often, this causes a lot of questions as to what the Federal Reserve sees as the economic outlook. It is quite common to see the stock market pull back significantly once the actual cuts come. On the way leading to those interest rate cuts, it is quite common to see the stock market celebrate the return of “easy money”, only to see those gains absorbed once traders have to focus on potentially negative headwinds for the US economy.

It is also a market that has been rather relentless over the last several months, showing signs of a slow, grinding market to the upside. That being said, a pullback would be healthy at this point in time, as it offers a bit of value for those who may not have participated. Beyond that, it is worth noting that volume will start to pick up, especially after the Friday Non-Farm Payroll announcement, as institutional traders will be returning from the traditional “vacation season” in the large financial firms.

NASDAQ 100

The NASDAQ 100 looks as if it is testing the bottom of an overall channel, as the Tuesday premarket trading has been quite ugly. This is the first day after Labor Day in the United States that could see real volume, and one thing to watch will be the 50 day EMA that sits just below the uptrend line of the channel. If the market were to break below there, then you could be looking at a test of the 22,750 level, and then again at the 22,250 level. While the NASDAQ looks likely to see a little bit of trouble here, this should end up being a relatively “normal correction” if in fact it does happen.

If the market were to break above the 23,500 level, then it’s likely that the NASDAQ 100 will continue to grind higher, perhaps trying to reach the crucial 24,000 level, which has caused a little bit of a headache. Ultimately, the market is still in an uptrend but looks like it is running out of momentum.

S&P 500

The S&P 500 is in in a channel, unlike the NASDAQ 100, but the most important level to pay attention to in this market seems to be the 6500 level. It has been like a brick wall as far as resistance is concerned, and we have been repelled a couple of times. If one were to describe this market, the best descriptor might be something along the lines of “A bullish market that is running out of momentum.” I think this will end up being a theme throughout the various indices, not only in the United States but worldwide as the rally has been a bit exaggerated in most places.

On a pullback, the 6350 level could offer support, right along with the 50 Day EMA near the 6315 level, followed after that by the 6200 level. If the S&P 500 were to be able to break above the 6500 level on a daily basis, it could kick off the next leg higher. However, much like the NASDAQ 100, this looks like a market that just needs a little bit of a pullback in order to attract new buyers.

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Read more: Understanding US Stock Market Indices: S&P 500, NASDAQ 100, Dow Jones, and More