Nasdaq 100, S&P 500 Forecasts: Will The Tumble Continue Despite Apple Earnings, FOMC Meeting?

The Nasdaq 100 and S&P 500 opened significantly lower on Monday on the back of coronavirus fears as the VIX jumped to its highest level since early October. In turn, haven assets like gold and the US Dollar were materially higher. Since the exact threat the virus poses to both populations and economic productivity is still unknown, the market will likely continue to wrestle with the theme in the days ahead. That being said, investors may shift their immediate focus to the upcoming FOMC meeting on Wednesday which could help stall further volatility for the time being.


Given the significance of the Fed’s policy path, specifically the expansion of the balance sheet, some traders may be hesitant to commit to a direction ahead of an event that could potentially uproot the current fundamental backdrop in the United States. Similarly, earnings from AMD and Apple on Tuesday afternoon may morph the role of coronavirus as a headlines concern if the companies forecast an adverse impact on revenue.


(Click on image to enlarge)

Nasdaq 100 price chart

In the meantime, the Nasdaq 100 will look to hold above the ascending trendline from early October and the 200-period moving average around 8,900. A break beneath the zone would allow the tech-heavy index to probe lower lows, with possible support around 8,740 to 8,700. 


While Apple possesses less influence over the S&P 500 than it does the Nasdaq 100, it is still the index’s largest component. Therefore, any transitory risk from the coronavirus cited in Apple’s outlook could seriously dent sentiment and the S&P 500. Tracking the ascending trendline from October, the S&P 500 has less space to work with from a technical perspective than the Nasdaq, so a disappointing report could easily drive the index beneath the area of confluent support.

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