Nasdaq 100 Forecast: NDX rebounds as Anthropic files for IPO

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Dow futures 0.5%, S&P 500 futures 0.9%  & Nasdaq futures  1.3%

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• US stocks rise after last week’s declines
• Anthropic files for its IPO, helping sentiment recover
• Fed rate decision and mega-cap tech earnings are in focus this week
• Oil prices fall on diplomacy hopes

U.S. stocks rise ahead of Fed decision and tech earnings

U.S. stocks opened higher after last week's sell-off, which pushed the S&P 500 and the Nasdaq into their second straight weekly decline.

However, sentiment towards technology has improved as investors assess Anthropic's IPO filing at the start of a week packed with corporate earnings and the Federal Reserve's rate decision.

Anthropic revealed steep losses and impressive revenue growth in its filing for a U.S. IPO, laying out ambitions to build AI systems capable of reshaping the global economy, even at a high cost.

The listing plan remains in place, even as other firms have stepped back owing to recent market volatility.

Attention will be on Microsoft and Alphabet on Wednesday, followed by Amazon on Thursday, as investors look for fresh evidence that rising AI spending is translating into revenue growth, margins and cash flow.

AI jitters sent tech stocks sharply lower last week and drove a rotation into Treasuries. Tech stocks in Asia remained under pressure at the start of this week, reflecting lingering doubts over the sustainability of AI spending.

The Federal Reserve will also announce its interest rate decision on Wednesday. The market is pricing in a 90% probability of a hold, with rates at 3.75%–4%. With this in mind, more attention will be on Federal Reserve Chair Kevin Warsh's commentary and the FOMC statement. The market is pricing in a 90% probability that the Fed will hike rates in December, so a hawkish hold could still drive Treasury yields and the U.S. dollar higher, putting pressure on stocks.

In addition to the FOMC decision, core PCE inflation and Q3 GDP figures will also be released. These could reverse the market reaction to the FOMC decision or reinforce it.

Corporate movers

Neo-cloud stocks are falling after Elon Musk posted on X that more than 200 neo-cloud companies would face “guppy-level death”. Following his comments, CoreWeave was up 5%, while Nebius was down 3.5%.

Tesla shares were 2% higher after Barclays upgraded the stock to overweight. The broker cited a potential merger and acquisition opportunity with SpaceX, growth in the company's robotaxi business and strength in its core business as reasons for a more bullish outlook.

Meta Platforms is up 1% after announcing a $35 billion stock offering to help finance its AI buildout. It also plans to raise $60 billion through an at-the-market programme. This comes after the share price fell almost 10% last week as the market fretted over negative free cash flow.

Nasdaq 100 forecast – technical analysis

After reaching a record high of 31,365, the Nasdaq reversed lower, falling below the 50 EMA before finding support around the 29,000 support zone. The recent recovery from this level once again faced rejection at the 50 EMA, reinforcing the bearish bias, and the price is now testing the 29,000 support zone again.

A break below this level would be significant, turning attention to 28,300, the June low, and the 200 EMA at 28,117. Should sellers take out this level, they could gain traction towards 27,050, the July low.

On the upside, any recovery would need to rise above the 50 EMA at 29,800 and the psychological 30,000 level. Above here, the rising trendline resistance at 30,200 and horizontal resistance come into focus. A rise above these levels would bring 31,000, the round number, into focus.

FX markets – USD rises, GBP/USD falls

The U.S. dollar is rising after a flat finish last week, with the U.S. Dollar Index at 102 as traders position ahead of a busy week, with attention on the Fed rate decision and key data points, including core PCE inflation and Q3 GDP. A hawkish Fed hold and strong data could lift Treasury yields, which have pulled back in recent weeks.

EUR/USD is falling amid a stronger U.S. dollar, despite a revival in demand for French bonds and ahead of the ECB rate decision this week. French bonds rose after Moody's left France's credit rating unchanged despite budget and political uncertainty. The relief is evident in the OAT market for now, but the reprieve may not last long.

GBP/USD is falling away from its highest level in a month as investors weigh mixed data from last week ahead of the Bank of England's rate decision next week. UK inflation was hotter than expected, and PMIs showed the private sector expanded at a faster pace than expected. Retail sales fell by more than expected, while consumer confidence dropped to its lowest level since the pandemic as cost-of-living pressures rise. Markets are pricing in up to three rate hikes by April 2027.

Oil slips on hopes of diplomacy in the Middle East

Oil prices are falling on Monday, giving back some of last week's gains amid optimism that hostilities between the U.S. and Iran could be easing. However, the downside is limited by ongoing attacks in the region.

Brent trades 2% lower after gaining 6% last week, while WTI is falling 1.5% today, having gained 2.3% last week.

Qatari mediators travelled to Tehran in an attempt to de-escalate regional hostilities. This has raised hopes of diplomatic progress, taking some of the risk premium out of oil prices.

However, the downside is being limited by ongoing Houthi attacks in Saudi Arabia. The Houthis claim to have struck a pumping station on Saudi Arabia's East-West crude pipeline and Riyadh airport.

Shipping through the Strait of Hormuz remains limited. October has so far been the worst month for attacks on commercial ships transiting the Strait of Hormuz.