Key Points
- Nasdaq 100 rose 0.61% to 26,037.25, tracking global gains in tech-heavy indices.
- Trader sentiment was buoyed by a year-long U.S.–China trade truce and upbeat AI-driven earnings.
- Traders remain cautious after Fed Chair Powell’s warning that another rate cut is “not a foregone conclusion.”
Global equities extended gains at the start of the week, driven by improving trade sentiment and continued enthusiasm for artificial intelligence investments.
The Nasdaq 100 advanced 159 points to 26,037.25, while broader risk appetite pushed the STOXX 600 up 0.4% and U.S. stock futures higher by 0.3%–0.5%.
Trade Truce and Macro Caution
Markets welcomed the announcement of a year-long trade truce between the U.S. and China, which helped ease geopolitical tension following months of tariff disputes.
However, traders remain sceptical over whether the agreement will last the full duration, especially as manufacturing data from Asia signalled continued weakness in external demand.
Meanwhile, the Federal Reserve’s 25-basis-point rate cut last week has left traders divided on the December policy outlook.
Chair Jerome Powell’s comment that further easing is “not a foregone conclusion” dampened earlier expectations of a year-end cut, even as Fed Governor Christopher Waller advocated additional support for the labour market.
Market pricing now reflects a 68% probability of a December cut, down sharply from near-certainty before the Fed meeting.
Corporate Earnings and AI Momentum
Investor focus turned back to earnings season, with attention shifting toward the AI and semiconductor sectors. Mega-cap results were mixed, yet optimism persisted following Amazon’s strong cloud performance and upbeat forward guidance from Apple.
This week, traders await quarterly results from AMD, Qualcomm, Palantir, Uber, and McDonald’s. Analysts expect these to gauge whether the surge in AI-related capex can translate into sustained revenue growth.
Technical Analysis
The Nasdaq 100 (NAS100) extended its rally to 26,037, gaining 0.61% as optimism surrounding the Trump–Xi meeting bolstered risk sentiment and revived hopes for smoother U.S.–China trade cooperation—particularly around AI, semiconductor exports, and technology supply chains.
The positive diplomatic tone helped fuel a rotation back into growth and tech-heavy equities, while expectations of potential Fed policy easing next quarter added to the bullish momentum.
From a technical standpoint, the index continues to display a strong uptrend, with prices consistently supported above the short-term moving averages (5, 10, 30).
The MACD remains well above the signal line, suggesting persistent upside momentum despite being near overextended levels.
With new highs forming above 25,800, the next resistance zone lies around 26,300–26,500, while initial support is near 25,200.
Overall sentiment stays firmly bullish, underpinned by renewed global optimism and capital flows back into tech sectors that stand to benefit most from improved U.S.–China economic dialogue.
Outlook
The short-term outlook remains constructive, with risk appetite underpinned by trade optimism, robust corporate earnings, and strong AI-related demand. However, market participants are likely to adopt a more cautious stance heading into year-end amid hawkish Fed rhetoric, tightening financial conditions, and potential volatility from U.S. macro data releases during the ongoing government shutdown.
