Nasdaq 100 Analysis: Rally Stalls Near Record Highs

The week continues, and one of the main factors starting to stand out in the Nasdaq 100 is the recent loss of momentum near record highs. This move comes after a strong recovery at the beginning of the week and shows that buying pressure has not yet stabilized in the short term.

Part of the recent recovery in confidence was linked to positive updates around the Middle East conflict. However, markets remain cautious ahead of tomorrow’s US interest rate decision. For that reason, the index could continue to show a phase of indecision over the coming trading sessions.

Has confidence not fully recovered?

Over the weekend, relevant updates emerged around the Middle East conflict, mainly tied to a possible tentative agreement between the United States and Iran. The agreement would point to a potential reopening of the Strait of Hormuz this week, which helped WTI crude oil quickly pull back toward the 80-dollar area in the short term.

First, the calmer tone around the Middle East and the reduction in the risk premium across financial markets allowed risk appetite to recover partially. This also supported a mild improvement in market confidence indicators. The Fear and Greed Index moved above 40 points and approached “neutral” territory, helping the Nasdaq recover part of its appeal as a risk asset at the start of the week.

Source: CNN

However, today’s session is starting to show a different picture. Rather than consistent buying pressure in the Nasdaq, the index appears to be entering a possible phase of indecision. This may be related to the pause in the recovery of confidence indicators as markets wait for tomorrow’s Federal Reserve decision. For now, markets are pricing in a probability above 99% that interest rates will remain unchanged at the current 3.75% level.

Still, the most important part may come from the central bank’s comments after the decision, as markets look for signals about the monetary policy path for the rest of 2026. So far, despite the recent decline in oil prices, the probability table still shows a chance above 40% of a possible rate hike toward a new reference level near 4.00% at the December meeting. This suggests that inflation concerns remain part of market expectations, and it is still unclear whether the Fed will lean toward a more restrictive or more cautious stance after tomorrow’s decision.

Source: CMEGROUP

With this in mind, the Federal Reserve decision will be key for Nasdaq. If the central bank signals that it could maintain a more restrictive stance, or even consider higher rates in the coming months, the equity market could face new challenges in sustaining its recovery. A more aggressive Fed could push US 10-year Treasury yields higher again, increasing the appeal of fixed income compared with risk assets.

For now, the recent drop in these yields below the 4.5% area has reduced part of the appeal of bonds and allowed demand to return partially to indexes such as the Nasdaq 100. However, if the Fed’s message revives expectations of higher rates, yields could recover and compete again with the equity market, which could limit sustained demand for Nasdaq over the coming sessions.

Source: TradingEconomics

Overall, confidence linked to the easing of Middle East tensions does not seem strong enough on its own to support consistent demand. If tomorrow the Federal Reserve suggests a more aggressive monetary policy stance for the rest of the year, Nasdaq could struggle to recover steadily in a higher-rate environment. This could reinforce a phase of indecision in the index over the coming sessions.

 

Technical outlook for the Nasdaq 100

Source: StoneX, Tradingview

• Sideways range begins to gain relevance: Based on the movements seen in previous weeks, directional strength in the Nasdaq has not stabilized in the short term. For now, the price is showing a neutral phase between a possible upper boundary near 30,800 points and a lower area around 28,400 points. Until price action manages to break clearly out of this range, it may be difficult to see a more structured trendline develop over the coming sessions.
   
• MACD: Now, the MACD histogram remains quite close to the neutral 0 area, suggesting balance in the strength of short-term moving averages. This indicates that a phase of indecision has started to gain relevance in Nasdaq’s short-term movements.
   
• RSI: A similar scenario can be seen in RSI, as the indicator is weakening near the neutral 50 level. This suggests a balance between buying and selling impulses in recent sessions, reinforcing an increasingly relevant indecision scenario in the short term.
   

Key levels:

• ·30,750 points – Relevant resistance: Record-high area that currently works as the most important reference for bullish movements. Price action moving toward this level could reinforce the importance of a new buying bias and revive the bullish trend seen in previous sessions.
   

• 29,500 points – Near-term barrier: Relevant neutral zone that coincides with important short-term pullbacks. While the price continues to trade around this level, the phase of indecision could keep gaining importance and open the door to an extension of the current sideways range over the coming sessions.
   
• 28,420 points – Key support: Recent low area near the 50-period simple moving average. Sustained moves below this level could start to show a dominant selling bias and open the door to more consistent selling pressure over the next few weeks.
   

Written by Julian Pineda, CFA, CMT – Market Analyst

Follow him on: @julianpineda25