Daily Price Outlook
Nasdaq 100 Index (NDX) Drops 0.78% to 12,986. The major stock index is down as investors weigh the latest round of corporate earnings. Tesla decided to lower the price of certain vehicles during the most recent quarter due to growing concerns that this would put downward pressure on profit margins.
As a result, net income decreased by more than 20% from the previous year.
Tesla Stock Tumbles
Tesla reported first-quarter earnings on Wednesday that fell short of Wall Street's expectations. Following the electric vehicle manufacturer's disclosure on Thursday that its net income and earnings had dropped by over 20% from last year, Tesla's shares fell more than 9%.
Elon Musk, the CEO, suggests that uncertainty in the macroenvironment may impact people's decisions to purchase automobiles.
Furthermore, Tesla's disappointing financial results had a domino effect on the market, driving down tech stocks and contributing to the loss in the SPX Index. Other technology stocks showed signs of potential weakness. Nvidia, AMD, Microsoft, Meta Platforms, and Apple all closed lower.
US Contracting Economy
The markets are currently trading sideways amid concerns about the contracting economy, fears surrounding a banking crisis that affected the broader financial sector last month, and upcoming economic data. Meanwhile, recently released US economic data indicates that the economy is contracting, potentially signaling a more severe slowdown than previously anticipated.
While unemployment claims increased from the previous week, the Philadelphia Fed manufacturing index declined more than expected to reach its lowest level since May 2020.
Additionally, Loretta Mester, president of the Cleveland Fed, warned that higher interest rates may be on the horizon. Moving forward, several factors, such as corporate earnings, monetary policy, and economic data, will continue to shape market sentiment and influence the performance of the SPX Index.
Daily Technical Levels
Pivot Point: 13068
NASDAQ – Technical Outlook
The well-known stock market index, NASDAQ, is currently showing a bearish trend around the $12,950 mark. The NASDAQ index might encounter immediate support close to the $12,900 level, which is strengthened by a double bottom pattern. However, this support level has already been violated now.
On the upside, immediate resistance can be found around the $13,101.8 level, and a bullish break above this point may push the NASDAQ price toward $13,250.
In contrast, a bearish breakout below the $12,962.6 level could potentially result in a further drop towards the $12,700 or $12,400 levels. Key technical indicators, such as RSI and MACD, are now entering the sell zone, which reinforces the selling momentum.
Therefore, closely monitoring the $13,100 level is crucial, as it may trigger an extended period of selling in NASDAQ.
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