Wall Street opens lower as S&P 500 and Nasdaq slip under key technical levels

Monday brings both the last session of the month and the beginning of a new trading week for the S&P 500 and Nasdaq Composite. So far this month, the S&P has risen 2.54%, while the Nasdaq has added 3.69%. But today both benchmarks are moving lower, surrendering a portion of those advances.

The selling pressure stems from worries over higher U.S. interest rates after Federal Reserve Chair Kevin Warsh delivered hawkish remarks at Jackson Hole on Friday. Escalating tensions in the Middle East have also driven oil prices significantly higher. The yield on the 10-year Treasury note rose 3.8 basis points to 4.76%, and the 30-year bond yield climbed 5.2 basis points to 5.260%.

The S&P 500 was down roughly 31 points, or 0.41%, trading at 7678.26. That drop pushed the index under its 100-hour moving average of 7716.94 and closer to the midpoint between that point and the 200-hour moving average at 7632.08.

Slipping under the 100-hour moving average has removed some positive momentum from the market. Yet because the index is still above the 200-hour moving average, buyers are still active. This creates a more neutral short-term technical picture, with traders awaiting the next decisive move.

If the index recovers above the 100-hour moving average at 7716.94, buyers would regain control and attention would turn to the record peak of 7816.70. On the other hand, a fall below the 200-hour moving average at 7632.08 would shift the bias more strongly toward sellers and pave the way toward the rising 100-day moving average at 7441.52.

A comparable technical pattern is unfolding in the Nasdaq Composite. The index traded approximately 75 points lower at 26,328, falling beneath its 100-hour moving average of 26,387.90. But it is still above its 200-hour moving average of 26,020.64.

Like the S&P 500, the drop below the 100-hour moving average has sapped some of the bullish outlook, yet the 200-hour moving average is still offering support and keeping buyers engaged.

A climb back above the 100-hour moving average at 26,387.90 would swing the bias back toward buyers. On the downside, a breach of the 200-hour moving average at 26,020.64 would hand sellers more short-term control, with the 100-day moving average at 25,753.74 emerging as the next significant level.