Nasdaq 100: Will the Recovery Hold?

• Global equities rebound as rate-cut bets rise and bond yields retreat.
• AI-fueled optimism lifts tech, but macro risks and valuations linger.
• Nasdaq tests key trend line, while peace talks and data may sway sentiment.
• For a limited time, get an InvestingPro subscription at the lowest price of the year with our Black Friday discount.

The powerful rally in the last couple of days for the major global indices has almost entirely wiped out the losses from the previous week. Renewed optimism about rate cuts has fuelled a rally in bonds and stocks, with the drop in oil prices also helping sentiment. For now, therefore, things have calmed down heading into the Thanksgiving break for US investors on Thursday. Rallying shares of Alphabet (NASDAQ:GOOGL), powered by the company’s sharpened focus on AI, has added to the positivity. But valuation concerns remain, while weakness in the economy is not a good sign for company sales and profits. Then, there is the ongoing concerns over debt levels in countries like Japan. So, the risks are still fairly balanced. After a sharp recovery, don’t be shocked if that momentum stalls now – though no signs of a reversal just yet.

Why Have Markets Bounced Back?

Markets have welcomed a drop in bond yields as speculation about interest rates continue. This has led to a sharp recovery in major indices such as the S&P 500 index. Kevin Hassett is widely tipped to replace Jerome Powell as Fed Chair, with a possible announcement before Christmas. Hassett sits squarely on the dovish wing, and his nomination could see markets pull down their expected terminal rate – meaning more rate cuts than expected in 2026. Investors are already looking beyond the December rate decision, which got a boost after a run of fairly tame US data bolstered rate-cut bets. Retail sales disappointed slightly, producer prices held the line, and consumer confidence wobbled as job and household finance jitters crept in. Traders now see an 85% chance of a 25-basis-point cut next month.

Ukraine – Russia Peace Process

Reports that Ukraine had accepted the peace deal terms were off the mark yesterday. The mood is still constructive enough, but several tricky issues remain under negotiation between Kyiv, Moscow and Washington. The US is pushing harder than ever to land a truce, and Ukraine is now signalling a willingness to bend on certain points. Steve Witkoff, Trump’s peace envoy, is speaking with President Putin today. Any hint of real progress could soften the dollar and energy prices, and potentially improve risk sentiment.

Nasdaq 100 Technical Analysis

After a three-week sell-off, the Nasdaq started this week on a positive note, extending Friday’s rebound—when the market hit its lowest level since September. Nasdaq 100 futures were continuing to climb at the time of writing, with the 25,000 level broken yesterday.

The Nasdaq index was now testing the underside of the trend line that had been in place since the beginning of summer. That bullish trend line broke last Thursday, and the index remained below it for a few sessions. Now it’s being challenged again from below, and the key question is whether the market can reclaim it and restore the bull structure, or whether it continues to reject at the line, leading to further volatility.

The next immediate resistance zone to watch sits between 25,200-25,300 —an area that previously acted as both support and resistance, making it pivotal for short-term direction. Above this zone , the next upside hurdles sit at 25,480, followed by 26,000.

On the downside, initial support comes in at 25,000. If that fails, the next levels to watch are 24,900, followed by 24,500. The big area that was tested on Friday remains between 23,845 to 24,160.

For now, everything hinges on how the index reacts to the broken trend line—whether it can push back above it and stabilise, or whether it remains capped beneath it and enters a period of heightened volatility again.

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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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