Stocks continue their peace (hopes) rally, Producer Inflation (PPI) misses! – Dow Jones and US Stock Market Outlook

• US Stock Benchmarks continue their previous session's mid-day rally as Iran situation slowly clears
• Crude Oil corrects another 5% and diplomatic attempts maintain high hopes for peace
• Exploring Technical Levels for the Dow Jones, Nasdaq and S&P 500

Markets continue to price in the peace rally, which could be slowly turning from fantasy to reality.

Uncertainty and war go hand in hand, and between talks and realities, discrepancies in narrative can create consequent Market confusion.

However, as we have seen during this war, Stock Markets tend to react strongly, with even limited positive developments serving as catalysts for significant movement.

As President Trump foreshadowed the reopening of negotiation channels between the US and Iran close to two weeks ago, Markets began a frantic 8%-10% rally from their recent lows and have barely looked back since.

The trade naturally escalated when a Ceasefire was reached right before a large ultimatum for major escalation in the War. The Ceasefire itself is quite weak and provides few guidelines on what could lead to a longer-term peace process, but it definitely took the tone out of potential escalation.

Participants wanted to see results, and while the world awaits further news, at least, the situation is pointing in the right direction with Iran reportedly opening the discussion on Nuclear enrichment and Israel/Lebanon direct talks beginning this morning (a first since 1993).

This is a much better situation than what the initial weekend news had reported.

The Strait of Hormuz remains at a standstill amid the new US Blockade. Iran also decided to stall its movement to move forward with the talks. Markets naturally took it a step further. They allowed some of the war premium in WTI to be unwound (down 5% to $93) and pumped stocks further.

The Prediction-Markets-based odds for a proper peace deal by April 30 are back at pre-weekend highs (~35%).

Add to the slowly confirming stance towards peace with a large miss in March PPI (Producer Price Index, which leads CPI Inflation), and Markets saw quite a few elements for bulls to come back hungry in the morning action.

The headline number came in hot at 4% (not good), but much better than the 4.6% expectations. The Core (eliminating Energy and Food prices) release took 0.2% from the headline number.

With demand-led inflation slowly abating, despite the large numbers, the Fed could slowly ease some anxiety. Nevertheless, they will have to see prices at the pump decidedly retreating before they can let off the pressure. Their incoming speeches will have to be tracked closely.

Markets are now looking ready for peace, so they will hold high expectations to the talks that will take place on Thursday.

Let's look at intraday charts and trading levels for the major US indexes: the Dow Jones Industrial Average, Nasdaq Composite, and S&P 500.

Discover:

• Silver (XAG/USD) at a Crossroads: Bullish breakout meets overbought momentum
• Critical Crossroads: USD/CHF tests key support at 0.78285. Is a bounce to 0.7900 up next?
• WTI (Oil) drops back below $100 after US-Iran talks set to resume – Oil Dynamics and Intraday Analysis

The Market is now broadly flashing green, with Mega Caps leading to the upside during an ongoing huge rebound.

Nvidia, Microsoft, Google, Amazon, Tesla and Meta are pulling the entire Indexes to some fresh highs and profiting largely to the gigantic rebound in the Nasdaq, while Energy stocks are taking a hit (from lower Oil prices).

Despite some local laggards, the Market is largely moving in tandem.

While the rally is slower in the Dow Jones, it is for now less chaotic and much more progressive than the spikes that have been seen in the other major Indexes.

The DJIA is still evolving within its main upward channel since having broken out of its war downtrend, and aims to test the 48,700 - 48,800 resistance in coming times.

From there, reactions will be essential:

• Rejecting it could point to a retest of 48,000 (channel lows)
• Breaking above should flash to 49,000
  • Above this, the road to 50,000 should be short-lived.

Dow Jones technical levels for trading:

Resistance Levels

• Mini-resistance 48,700
• Major Resistance – 49,000 to 49,200
• 49,500 psychological mini-resistance
• 49,900 to 50,000 Resistance and Daily Range Highs

Support Levels

• Momentum Pivot 48,300 (bull above)
• Pivotal Support at 48,000 (Bearish below)
• Mini Support 47,400 to 47,600
• War Resistance now Key Support 47,000 +/- 100 Points (Bearish below)
• January 2025 Highs 45,000 to 45,280

Nasdaq has largely beaten any expectations or predictions in its gigantic war-rebound, up 12% and breaking all sorts of resistances since.

Now testing the 25,700 to 25,850 resistance, the momentum is nearing overbought soon but with the pace of the buying, only bearish news around the talks could stop the bull train to all-time highs.

To learn more, check out our in-depth Nasdaq Analysis (watch out for CFD/Composite price differentials):

Read More: Technical levels to watch as Nasdaq 100 approaches all-time highs

Nasdaq technical levels of interest:

Resistance Levels

• Major resistance 25,700 to 25,850 (testing)
• February Highs 25,934
• 26,000 psychological resistance (+/- 50 points)
• All-time high resistance 26,200 to 26,300

Support Levels

• 25,400 to 25,500 Feb Range Intraday Pivot
• Pivotal Support 25,000 to 25,250
• 24,450 to 24,550 Key Support
• Major 2026 Pivotal Support 23,800 to 24,000
• August 2025 Support 23,500 to 23,650
• Early 2025 ATH at 22,000 to 22,229 Support

Similarly to Nasdaq, the S&P 500 is dominating the charts and breaking all types of resistance.

The Index is currently testing its major December All-Time High level (6,970). As it also evolves in a bull channel, it will be interesting to see if bulls can manage a push above, however, if Oil fails to break $93, it will be difficult to assume so.

In that event, look for a retest of 6,900 for dip-buying (if the situation doesn't worsen!)

S&P 500 technical levels of interest:

Resistance Levels

• December ATH Resistance 6,945 to 6,975 (testing)
• ATH Resistance and Range Highs from 7,000 to 7,020
• Next key potential resistance 7,060 to 7,080

Support Levels

• Key Pivot Zone 6,880 to 6,900
• Pivotal Support 6,750 to 6,770
• 6,680 to 6,700 Key Support
• 6,580 to 6,610 Support
• 6,490 to 6,520 October lows
• 6,300 psychological level (War lows)

Keep track of WTI Crude and the latest headlines throughout the week to stay ahead of the game.

Safe Trades!

Follow Elior on Twitter/X for Additional Market News, interactions and Insights @EliorManier