US stocks ended mixed overnight, driven primarily by disparate earnings results. DOW registered its first 9-day rally since 2017, gaining 0.47%, largely boosted by better-than-expected earnings results from pharmaceutical giant Johnson & Johnson. On the other hand, the tech-heavy NASDAQ slipped -2.05% due to disappointing results from streaming giant Netflix and electric carmaker Tesla.
The notable pullback in NASDAQ suggests that US stock markets could be broadly transitioning into a consolidation phase. This shift happens in anticipation of the FOMC rate decision scheduled for next week, followed by crucial employment data in the subsequent week.
From a technical perspective, NASDAQ could be bracing for a deeper correction, given that it was already close to 161.8% projection of 10088.82 to 12269.55 from 10982.80 at 14511.22. Break of 13864.06 resistance turned support would likely trigger deeper fall to 55 D EMA (now at 13306.68).
Should this scenario transpire, it should confirm a near term shift in risk sentiment, potentially providing a boost to Dollar and extending its current rebound.
