Wall Street Moves Positively Above 5,000 Level

The SP500 successfully surpassed the 5000 mark and continued its upward trajectory, fueled by an overwhelmingly positive market sentiment leading into the weekend.

Traders today directed their attention towards the conclusive data on inflation reports for December.

Notably, the November Consumer Price Index (CPI) was revised upward from 0.1% to 0.2%, while the December CPI was adjusted downward from 0.3% to 0.2%.

The persistent surge in demand for technology stocks remained the primary catalyst for the SP500.

Currently, it appears that traders are poised to invest in almost any stock within the tech sector.

Conversely, Consumer Defensive and Energy stocks faced downward pressure in today's trading session.

Having recently settled above the psychologically significant 5000 level, the SP500 stands a good chance of gaining further upward momentum.

The Relative Strength Index (RSI) is currently in overbought territory, indicating an increased risk of a pullback.

However, the elevated RSI is consistent with a robust trend, suggesting that the SP500 has ample room for continued momentum.

The NASDAQ index is reaching new highs as traders continue to enthusiastically invest in tech stocks. NVIDIA, in particular, experienced another surge, marking a nearly 50% increase year-to-date following a strong performance in 2023.

A classic Fear of Missing Out (FOMO) scenario is unfolding in NVIDIA stock, with traders eager to capitalize on opportunities in the artificial intelligence (AI) space.

Despite concerns about current valuations, traders are optimistic that high demand for AI chips will quickly boost earnings estimates.

Predictably, the NASDAQ is currently overbought, and with no established resistance levels in uncharted territory, traders should brace themselves for swift market movements.

On the other hand, the Dow Jones index faced a downturn, primarily due to pullbacks in Caterpillar, Chevron, and Disney stocks.

The market's focus on tech stocks contributes to a somewhat bearish sentiment for the Dow Jones, which includes several defensive stocks.

The nearest support level for the Dow Jones is within the range of 38,500 - 38,550. A breach below this level could pave the way for a test of the subsequent support at 38,100 - 38,150.