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SP500 retreats amid a strong sell-off in the tech stock segment. The pullback is led by Alphabet, which is down by almost 10% after the release of the earnings report. The company beat earnings expectations but traders focused on the disappointing results of its cloud computing business. Alphabet was trading near yearly highs ahead of the report, so the market was not prepared for bad news. The sell-off in the Alphabet stock hurt market sentiment in the tech space and served as the key catalyst for today’s pullback in SP500 and NASDAQ.
From the technical point of view, SP500 is trying to settle below the support at 4200 – 4215. RSI is in the moderate territory, so there is enough room to gain additional downside momentum.
NASDAQ declined by more than 2% due to Alphabet’s strong pullback. Amazon, which will release its earnings report on October 26, after market close, has also found itself under strong pressure. Traders worry that Amazon’s cloud business would also miss expectations.
NASDAQ settled below the previous support at 14,560 – 14,680 and is moving towards the next support level, which is located in the 14,200 – 14,300 range.
Dow Jones
Dow Jones remains stuck near the 33,000 level despite the broad sell-off in the equity market. Microsoft, which is up by 3% after the earnings report, provided material support to the Dow Jones index today.
If Dow Jones manages to stay above the important 33,000 level, it will head towards the nearest resistance at 33,600 – 33,700.
For a look at all of today’s economic events, check out our economic calendar.
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