Nasdaq 100 Shakes Off Hawkish Fed With Broader Bullish Structure Still Intact

• US futures slip as firmer Fed tone lifts dollar and trims cut bets.
• Hawkish FOMC minutes push rate cut expectations toward July timeline.
• Nasdaq holds key 24,500 support with breakout level near 25,060.

US index futures eased lower, largely taking their cue from weakness in Europe, where a raft of earnings-driven moves knocked several individual names and dampened broader sentiment. Stateside, the US dollar staged a respectable rebound after a run of mostly upbeat economic data yesterday and on the back of the minutes from the January meeting of the FOMC, which struck a slightly firmer tone on inflation.

That partially explains why we have also seen stocks ease back as the chances of a sooner rate cut have been trimmed. Still, the underlying trend is bullish, even if US indices have underperformed Europe so far this year. But recent signs of strength in technology names mean we could see the Nasdaq 100 finally join the rally soon.

FOMC Was a Bit More Hawkish Than Expected

Policymakers at the Fed made it clear they remain uneasy about price pressures, with several noting that rates could rise again if inflation remains stubbornly above target. That’s what the minutes of the January meeting revealed.

Interestingly, a number of participants favoured a more “two-sided” communication around future rate intentions — in other words, keeping the door open not just to cuts, but to the possibility of further hikes should inflation reaccelerate. That’s a subtle but important shift in tone.

Recent U.S. data have, on balance, surprised to the upside. Labour market indicators suggest downside risks to employment have eased, which in turn reduces the urgency for immediate rate cuts. Economic activity has also remained relatively resilient. That narrative will be tested again with today’s release of jobless claims, Philly Fed manufacturing index and pending homes sales. Friday’s PMI releases, which should offer a timely snapshot of momentum across the manufacturing and services sectors, will also be watched closely.

So far, however, “good” data haven’t been strong enough to seriously challenge expectations for eventual easing. Equities have therefore remained broadly supported. Traders have trimmed their rate-cut bets at the margin, with markets now leaning towards a first reduction in July rather than June.

Much, of course, hinges on inflation, especially in light of the FOMC minutes. If price pressures continue to soften, that could reopen the door to an earlier move — or potentially more cuts later in the year. That’s why Friday’s core PCE reading, the Fed’s preferred inflation gauge, takes on added significance. It may well shape the near-term direction not just for rate expectations, but for the dollar and equities alike.

Nasdaq 100 Technical Analysis

There’s been plenty of chatter about the AI bubble deflating, and it’s true that a handful of tech heavyweights have underperformed this year. But if you strip away the noise and look purely at the chart, the Nasdaq 100 hasn’t confirmed that
narrative.

Crucially, the index has continued to hold above major support — most notably the 24,500 zone. Technically, this area has proven its importance time and again. Each test has been met with a fairly decisive rebound. The bounce on 6 February stood out in particular, with a sharp rally from that region and the formation of a bullish engulfing candle (circled).

Since then, upside momentum has been steadier rather than explosive. We did see a push higher, but it lacked real follow-through and faded relatively quickly. The subsequent pullback was orderly — and importantly, it failed to take out the low of that bullish engulfing candle, telling us that the buyers are still controlling price action.

For now, the structure remains constructive. A break above the descending resistance trendline would add weight to the bullish case and could invite renewed technical buying.

On the topside, 25,060 is the level to watch today. It was tested yesterday and held. That area aligns with the low of a prior candle that was broken to the downside last Thursday. A daily close back above 25,060 would be an encouraging signal.

On the downside, near-term support comes in around 24,75. If the short-term bullish structure is to remain intact, that level now needs to hold and act as a platform for any further upside this week. But if the bullish trend line breaks instead, and we dive below 24,500, then things will become more volatile, and we will have to re-assess the bullish argument then.

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Disclaimer: This article is written for informational purposes only; it does not constitute a solicitation, offer, advice, counsel or recommendation to invest as such it is not intended to incentivize the purchase of assets in any way. I would like to remind you that any type of asset, is evaluated from multiple perspectives and is highly risky and therefore, any investment decision and the associated risk remains with the investor.

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