US STOCKS OUTLOOK:
- S&P 500 falls modestly after stalling at technical resistance. The Nasdaq 100 ekes out a small gain in a mixed session
- Market attention will center on the U.S. employment report on Friday
- This article examines key levels to watch on the Nasdaq 100
U.S. stocks paused for breath on Thursday after the recent rally, halting upward momentum in the market as traders opted for some caution ahead of a high-impact event on Friday morning: the release of the July non-farm payrolls survey, a key report that can offer valuable insight into the health of the economy at the start of the third quarter.
When it was all said and done, the S&P 500 declined 0.08% to 4,152, stalling at a pivotal technical resistance near the 4,165 area, with the energy sector leading the downside amid a relentless sell-off in oil prices. The Nasdaq 100, for its part, climbed 0.44% to 13,311, bolstered by a decline in U.S. Treasury rates. During the session, the 10-year yield fell 3 bps to 2.66%, while the 2-year dropped 5 bps to 3.01%.
In terms of notable moves on Wall Street, shares of Coinbase (COIN) soared more than 40% at the open in cash, but later trimmed most of their advance, closing with a gain of just 10% at $88.9. The initial spike was sparked by news that the cryptocurrency exchange is partnering with investment management giant Blackrock to make it easier for institutional investors to trade Bitcoin. While this relationship can be seen as a positive catalyst for Coinbase, companies in the crypto space will not be out of the woods until digital assets begin to stabilize after the 2022 crash.
Looking ahead, all eyes will be on the July U.S. labor market report due for release Friday morning. According to a poll conducted by Bloomberg News, U.S. employers added 250,000 workers last month, after generating 372,000 jobs in June. For sentiment to improve further, hiring activity should remain healthy, otherwise recession fears could become more pervasive, weighing on stocks, and preventing them from extending their recovery. Any result that is around consensus forecasts can be supportive for risk assets, so long as wage pressures continue to moderate.
NASDAQ 100 TECHNICAL ANALYSIS
The Nasdaq 100 has risen aggressively from its 2022 lows and continues to approach a key resistance near 13,350 – the upper trendline of a medium-term descending channel. If the index manages to clear this hurdle in the coming sessions, buying momentum could accelerate, paving the way for a move towards 13,575, followed by 13,908, the 50% Fibonacci retracement of the November 2021/June 2022 correction. On the flip side, if sellers resurface to fade the recent strength, initial support appears at the psychological 13,000 level and 12,600 thereafter.
NASDAQ 100 TECHNICAL CHART