Here’s Our Game Plan as Indices Battle Key Support Levels
We’ll continue to track the data and signals, biding our time for better technicals and compelling opportunities.
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As we finalize our comments on last night’s quarterly results from Meta (META) as well as what we’ve learned from IBM (IBM), SAP SE (SAP), Nokia (NOK) and others, we want to share two technical lines we are closely watching given the market’s renewed move lower.
The S&P 500 and the Nasdaq Composite are once gain battling with key support levels, as you can see in the charts below. The S&P 500 has moved below the 50-day simple moving average (SMA) near 7704 and that means barring a retracement like we’ve seen in recent days, the next layer of support is near 7,604 or the 100-day SMA.
Meanwhile, the Nasdaq is also bearing down on its 100-day moving average near 26,268.
While several of our holdings tied to the AI infrastructure build-out are falling today, near-term we’re going to hold off on tapping our Portfolio shopping list or scooping up additional AI infrastructure-related shares. Yes, we continue to see positive data points, including this fresh one from research firm Gartner:
Gartner says IT spending will reach $7.3 trillion in 2027, up from a forecast $6.39 trillion this year. The gains are concentrated in data center systems, expected to grow 55%. The AI industry can’t build enough of the facilities in which computer systems reside.
In our opening comments, we discussed the impact higher commodity costs are having, and with 75% of the S&P 500 to report after this week, odds are we are going to see more companies trimming back Q4 2026 and potentially 2027 expectations. At the same time, renewed headlines about plans to strike Iran following the midterm elections will keep energy prices and corresponding inflation pressures at the forefront of investor frontal lobes.
So, while it may be tempting to put capital to work, we’ll want to tread carefully, preserving cash in the near-term, and letting opportunities become more compelling. As we’ve seen several times this year, things can change quickly so we would ask that near-term you keep a close watch on your email inbox.
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At the time of publication, TheStreet Pro Portfolio was long META.
