Stock market on November 6: S&P 500 and NASDAQ recover slightly

[Ben Graham]

Yesterday, US stock indices closed with gains. The S&P 500 rose by 0.37%, while the Nasdaq 100 gained 0.35%. The Dow Jones Industrial Average strengthened by 0.38%.

The indices recovered as buyers returned to the market after the recent dip. Asian indices rose by 1.1% following the sharpest two-day decline since April of this year, with the Hong Kong and Japanese indices among the leaders in growth. All 11 industry groups in the index, except for one, demonstrated growth. Shares of Softbank Group Corp. increased by 1% after reports that the company is exploring the possibility of acquiring American chipmaker Marvell Technology Inc. earlier this year.

The rise in Asia followed a recovery on Wall Street, where investors returned to some of the biggest beneficiaries of the artificial intelligence boom after Tuesday's sell-off. Today, futures for the S&P 500 and Nasdaq 100 fell by 0.1%, while shares of Qualcomm Inc. dropped by 2.6% in post-market trading. European stock indices opened sluggishly.

Following a brief pullback that raised concerns about the overvaluation of the tech sector, buyers returned to the market thanks to strong earnings performance and positive labor market data from the US. Trump's statements that stocks would gain value were also positively received by traders. However, aside from the short-term optimism, the market faces significant challenges. Inflation, while showing signs of easing, remains elevated and requires the Federal Reserve to maintain a tight monetary policy. Concerns about the loss of momentum in the tech sector, which has driven growth in recent months, have increased following comments from Fed Chair Jerome Powell regarding potential future interest rate cuts.

Gold continued to rise, along with oil, which saw a slight increase after three days of losses. Treasury bonds rose ahead of several Fed officials' speeches. It is clear that today, traders will be looking for hints regarding the future trajectory of the Fed rate.

As for the technical picture of the S&P 500, the main task for buyers today will be to overcome the nearest resistance level of $6,801. This will help the index gain ground and pave the way for a potential surge to the new level of $6,819. An equally important objective for bulls will be to maintain control above $6,837, which would strengthen buyers' positions. In the event of a downward move driven by reduced risk appetite, buyers must assert themselves around the $6,784 area. A break below this level would quickly push the trading instrument back to $6,769 and open the path toward $6,756.

The material has been provided by InstaForex Company - www.instaforex.com