Nasdaq 100 Forecast: QQQ rises to a record high as PPI inflation unexpectedly fell

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• US stocks rise to a record high as Fed rate cut expectations build
• US PPI fell -0.1% MoM in August
• Oracle jumps 29% after impressive revenue guidance
• Oil rises for a fourth straight day

Stocks rise on Fed rate cut expectations

US stocks are rising to record levels after cooler-than-expected producer price inflation for August boosted expectations of an interest rate cut from the Federal Reserve next week.

US PPI  fell- 0.1% MoM compared with expectations of a 0.3% increase. On an annual basis, PPI rose 2.6% in August, below the 3.3% rise expected by economists. The report suggests that companies held back from outside price increases last month despite higher costs from Trump's tariffs. This comes following a sizeable increase in July, though many firms are worried that steep markups could push customers away at a time when economic uncertainty remains high.

The data adds to evidence that the Federal Reserve will cut interest rates next week. Following soft jobs data, the market is fully pricing in a 25 basis point rate cut next week, with around 66 basis points worth of rate cuts before the end of the year.

However, the extent to which companies pass on the burden from tariffs to consumers will be key in shaping the path for interest rates.

 Yesterday, a provision to payrolls through to March 2025 across the year change that 911,000 fewer jobs were added to the US economy, meaning that the jobs market was significantly weaker than initially thought. This came after the weaker-than-expected US non-farm payroll report on Friday.

Attention will now be turning to US CPI data tomorrow, which is expected to tick Kaya to 2.9% year on year.

Corporate news

Oracle is set to open 29% higher after unveiling an impressive cloud revenue outlook, offsetting fiscal first-quarter results that fell short of expectations. Oracle’s multi-cloud database revenue, driven through partnerships with hyperscalers like Amazon, Alphabet, and Microsoft, soared 1529% in the quarter. Revenue at its Oracle cloud infrastructure division is expected to surpass half a trillion dollars amid signs of solid demand for the relatively low-cost AI-powered offering.

GameStop is rising 6% premarket after the electronic games retail company posted a surprisingly strong quarter with revenue up 22% to $972.2 million.

Apple is edging slightly lower after the tech giant unveiled its iPhone 17 lineup and refreshed Apple Watches and AirPods. The Apple iPhone 17 Pro will start at $1099, up $100 from the previous Pro model.

Nasdaq 100 forecast – technical analysis

The Nasdaq has risen above the falling trendline resistance, reaching a fresh record high. With blue skies above, buyers will move towards 24,500 as the next logical level ahead of 25,000. Support is at 23,500, the falling trendline support and 20 SMA—a break below 23,000 creates a lower low.

FX markets – USD falling, EUR/USD falls

The USD is falling after weaker-than-expected PPI inflation data supports the view that the Fed will cut rates in September.

The EUR/USD is modestly lower with French political turmoil still in focus and ahead of the ECB rate decision tomorrow. President Macron has appointed a new Prime Minister, the third in a year, tasked with uniting the divided coalition to push a budget through. The ECB is expected to leave rates unchanged tomorrow.

The GBP/USD is broadly unchanged and propped up by expectations that the BoE will leave rates unchanged next week and is unlikely to cut rates again until early next year, given sticky inflation at almost double the BoE’s target level.

Oil rises for a fourth straight day.

Oil prices are rising over 1%, extending gains for a fourth straight day with geopolitical risks in focus, although oversupply worries limit gains.

Yesterday, Israel attacked Hamas leadership in Qatar, which lifted the risk premium on oil. Meanwhile, geopolitical tensions also rose after Poland shot down drones during a widespread Russian attack in Western Ukraine. There has been no immediate threat to supply, keeping the risk premium capped.

Meanwhile, the upside is also being limited by concerns of a supply surplus ahead. The EIA cautioned that crude prices could be under significant pressure in the coming months owing to rising inventories as OPEC+ lifts output.