The mood on Wall Street’s finally brightened late in the day yesterday and that sentiment has carried forward to today’s session, with futures sharply higher, although it remains to be seen whether it can last. Unsurprisingly, Nvidia was the spark again. After-hours trading saw the chip giant rip higher, dragging the rest of the sector along with it. The question now is whether Nvidia’s momentum can genuinely revive broader risk appetite, or if this is just another temporary burst of optimism in what has been a shaky November for global indices (and cryptos). As far as today’s session goes, the Nasdaq 100 forecast still leans cautious in my view, despite the relief rally. Macro headwinds haven’t magically disappeared, and the market will be paying attention to any shifts in bond yields as well as the AI sentiment. The upcoming release of US jobs data for September has the potential to move bond yields, which could create some volatility for stocks too.
Nvidia sets the tone again
Nvidia earnings beat expectations and handed investors a revenue outlook strong enough to improve global risk sentiment. Shares jumped around 5% after hours, offering a much-needed boost to markets that have spent the last few weeks worrying about inflated tech valuations, AI exuberance, and the sustainability of earnings momentum.
But the issue is that as big as Nvidia is, it can only carry this market so much. The stock has become a barometer for AI enthusiasm, and while its numbers help counter fears of an AI spending bubble, confidence across the rest of the sector remains mixed. With earnings season essentially behind us, investors don’t have many fresh catalysts to prove that tech demand outside Nvidia is equally resilient. That limits the upside for broader indices.
Rising yields remain the real villain
While Nvidia has grabbed headlines, let’s not forget the recent surge in global bond yields, especially in heavily indebted economies like Japan. Investors are demanding higher compensation for rising fiscal risks, and the bond market is repricing aggressively. That’s a problem for growth stocks, and therefore for any Nasdaq 100 forecast going forward.
The yen continued to weaken this morning, pushing the USD/JPY towards the 158 handle. Markets fear Japan’s policy response is lacking, and with yields spiking, the classic carry trade is unwinding hard. When carry flows reverse, leveraged equity positions tend to get hit across the board, and tech has been no exception.
Crypto’s recent collapse – Bitcoin has slid nearly 30% from its peak – also adds to the global market volatility. All of this may make it harder for the Nasdaq 100 to sustain any upside run, even with Nvidia’s help.
Technical Nasdaq 100 forecast and key levels to watch
Technically, the Nasdaq 100 chart is still not convincing despite the big bounce off the lows. That’s because the Nasdaq has snapped its multi-month bullish trend line on Monday, and the index has stayed below it since. That alone raises a red flag. A short-term structure of lower highs and lower lows has emerged, signalling the shift from a buy-the-dip market to a more defensive, uncertain regime.
As of this writing, our US 100 index, derived from the underlying Nasdaq 100 futures, was retesting the underside of the broken trend line, now overlapping with the 21-day EMA and prior resistance, around the 25,100-25200 area. A sustained break above this area would open the door to resistance near 25,390, which also aligns with the upper boundary of the current descending channel. The bulls still have a lot of work ahead to reclaim control.
Support sits at 24,875 first. A break below that exposes 24,600, then this week’s low near 24,300. Given the broader global selloff and liquidity stress signals, the burden of proof remains firmly on the bulls.
Right now, the bounce looks impressive, but it may turn out to be a potential dead-cat move than the start of a meaningful recovery. Until price invalidates the bearish structure any optimistic Nasdaq 100 forecast should be taken with caution.
-- Written by Fawad Razaqzada, Market Analyst
Follow Fawad on Twitter @Trader_F_R
