Nasdaq 100 Analysis: The Index Rebounds After Tariff Suspension

Although the Nasdaq 100 started the session with a clear bearish bias, it showed a solid recovery toward the close, posting gains of more than 1.8% and moving back toward the 25,500-point area. This renewed buying pressure emerged after the announcement of the cancellation of potential tariffs on Europe, which helped restore market confidence and allowed the index to regain ground in the short term. As long as this improvement in sentiment persists, buying pressure could remain dominant over the coming sessions.

Tensions ease

Over recent sessions, market commentary had intensified around the possibility of tariffs on Europe, initially expected to start at around 10% from February 1. However, following a series of meetings held in Davos, President Donald Trump announced that certain agreements had been reached and confirmed the cancellation of the proposed tariffs, after establishing a framework for security cooperation with NATO.

The removal of these tariffs, after several days of diplomatic tensions, has been received as a relief for short-term market confidence. This shift has allowed risk appetite to strengthen once again. As the Nasdaq 100 is considered a risk asset, the recovery in confidence has been directly reflected in its short-term price action, as tensions ease in a meaningful way.

In fact, this improvement in sentiment is already visible in the Fear and Greed Index, which measures overall market confidence. The index has rebounded quickly toward the 53-point area, moving back into neutral territory, while displaying an upward slope that brings it closer to the “greed” zone. This rebound has been reinforced as tariff-related threats toward Europe were withdrawn, signaling a sustained recovery in short-term market confidence.

Source: CNN

With this in mind, the reduction in diplomatic tensions has allowed short-term confidence to strengthen again, supporting an environment where risk appetite can be sustained. As long as no new surprises emerge and tensions do not resurface in the coming sessions, the buying pressure that has begun to develop in the Nasdaq 100 could remain relevant in the short term.

 

Long-term confidence

In addition to the recovery in short-term confidence, long-term sentiment indicators have also started to improve. According to the AAII Investor Sentiment Survey, 49.5% of investors currently hold a positive outlook for the U.S. equity market over the next six months. Meanwhile, 22.3% remain neutral and 28.2% maintain a pessimistic view. While these figures do not reflect overwhelming optimism, they do point to a gradual recovery in long-term confidence.

Source: AAII

As the AAII confidence index continues to show steady week-to-week improvement, this trend could reinforce long-term demand stability for equity indices such as the Nasdaq. In this context, long-term confidence may become an additional factor supporting more consistent buying pressure over the coming weeks.

 

Nasdaq 100 Technical Outlook

Source: StoneX, Tradingview

• Sideways range remains dominant: Despite the recent rebound, the Nasdaq continues to face the technical structure of a broad sideways range, capped near 26,000 points and supported around 24,000 points. As long as price remains within this zone, it will be difficult to see the formation of a more clearly defined trend in the short term.
   
• RSI: The RSI has managed to move back above the neutral 50 level, indicating that buying momentum has regained control when considering price action over the last 14 sessions. If the indicator maintains this upward slope, it could continue to support short-term buying pressure.
   
• MACD: The MACD histogram is approaching the zero line, and a sustained crossover above this level could signal bullish dominance in short-term moving averages. This scenario could further reinforce consistent buying pressure in the sessions ahead.
   

Key levels:

• 26,000 points – Key resistance: This level aligns with the Nasdaq’s all-time highs and represents the most important upside barrier. A sustained breakout above this zone could reactivate a stronger bullish bias and open the door to a new upward trend over the coming weeks.
   

• 25,140 points – Nearby barrier: A neutral zone located near the midpoint of the sideways range and aligned with the 50-period simple moving average. Prolonged price action around this level could reinforce a consolidation scenario.
   
• 24,700 points – Key support: This level corresponds to the lows of recent weeks and represents the main support area to monitor. A pullback toward this zone could reactivate downside pressure and open space for renewed selling in the short term.
   

Written by Julian Pineda, CFA, CMT – Market Analyst

Follow him on: @julianpineda25