Nasdaq 100 Forecast: QQQ at record highs ahead of Powell's second testimony

US futures

Dow futures 0.03% at 43,097

S&P futures 0.23% at 6100

Nasdaq futures 0.48% at 22290

In Europe

FTSE -0.25% at 8742

DAX -0.5% at 23530

• US stocks rise as the Israel-Iran ceasefire holds up
• Fed Chair Powell testifies again
• Tesla rises despite European EV sales falling sharply
• Oil steadies after dropping 14%

Iran-Israel ceasefire holds & Powell in focus

U.S. stocks are set to open modestly high on Wednesday as a fragile ceasefire between Israel and Iran continues to hold up and as investors await more comments from Federal Reserve chair Jerome Powell.

The Nasdaq closed at a record high yesterday, and all three major indices posted gains of over 1% as the de-escalation in the Iran-Israel conflict supported risk sentiment. As a result of the ceasefire, oil prices have fallen around 14% over the past few days, easing concerns about the impact on inflation.

Federal Reserve Chair Jerome Powell will testify on Capitol Hill for a second day and will likely repeat yesterday's stance. Powell reiterated the Fed's wait-and-see approach to interest rates as tariff-induced inflationary pressures could kick in. However, he also said that lower-than-expected inflation or weakness in the labour market could cause the central bank to move to cut interest rates sooner.

The market is now pricing in around 60 basis points worth of rate cuts before the end of the year, with a 70% chance of the first rate cut coming in September.

US GDP data tomorrow and Friday's core PCE inflation report will shed some light on how Trump's tariffs are impacting the economy.

Corporate news

Tesla is set to open higher despite seeing its car sales in Europe drop 27.9% in May compared to the same month a year earlier. The fall came even as EV sales in the region rose 27.2% across the same period. This comes as customers increasingly choose cheaper Chinese EVs.

FedEx fell 5% premarket after earnings guidance for the current quarter was weaker than expected. FedEx forecast adjusted EPS of $3.40 to $4.00, while most analysts had expected $4.05. This overshadowed fiscal Q4 numbers that beat forecasts.

Coinbase is up 3% on the back of Benstein's bullish investment opinion. The analysts lifted the price target by 65% to $200, highlighting Coinbase’s dominance in the US.

Nasdaq 100 forecast – technical analysis.

The Nasdaq 100 has recovered from Monday’s 23,350 low, rising above 22,245 to a fresh record high at 22,280. The bearish divergence on the RSI could suggest that underlying momentum does not support the price increase. In the case that bulls push higher, with blue skies above 22,500 is the next logical target. On the downside, support can be seen at 22,000, and a break below 21,500 is needed to create a lower low.

FX markets – USD rising, EUR/USD falls

The USD is steadying around a yearly low as the market continues to assess the Federal Reserve's monetary policy outlook. The dollar fell sharply at the start of the week as safe-haven demand unwound following the ceasefire agreement.

The EUR/USD is falling back to 1.16 amid a stronger USD and after comments from ECB officials. ECB policymaker Villeroy de Galhau said the central bank could still cut rates despite recent oil market volatility. Meanwhile, ECB chief economist Philip Lane said the price doesn't bring inflation back to the 2% target is almost over.

GBP/USD is edging lower but holds above 1.36 after hitting its highest level since January 2022  in the previous session. The data from the survey showed that the UK jobs market was revealing signs of a slowdown, which is below inflation pay growth and a fall in job vacancies. Yesterday, Bank of England governor Andrew Bailey said there were signs that the labour market was softening and he repeated the view that interest rates were likely to continue to fall. The markets are pricing in an 80% chance for a rate cut in August.

Oil steadies after steep ceasefire-inspired losses

Oil prices are holding steady after dropping 14% at the start of the week, as investors continue to assess the stability of the ceasefire between Iran and Israel.

Oil prices tumbled on Monday and Tuesday following the announcement of the Iran-Israel ceasefire, calming fears over a broadening out of the conflict and oil supply disruptions.

Meanwhile, industry data showed that US crude inventories fell by 4.23 million barrels in the week ending June 20, offering some support to oil prices.

Attention will be on Jerome Powell's testimony for further clues on the outlook for interest rates. A lower interest environment is considered beneficial for the oil demand outlook.