The Nasdaq 100 is closing in on its June peaks after tech stocks rallied on strong demand for Meta's new AI assistant. The advance comes even as markets price in roughly a 56% chance of another Fed rate hike in October, with the dollar near a seven-week high and the yen under pressure.
The Nasdaq 100 has resumed its ascent and is fast approaching its June peaks at 30,587-to-30,762, a level that, if broken, is likely to engage the 31,000 region.
Strong demand for Meta's Muse AI assistant reignited enthusiasm for technology stocks, pushing the Nasdaq to a record close, lifting Asian equities to a two-week high and sending Advanced Micro Devices above a $1 trillion valuation. Previous resistance levels are now acting as support: the late June high at 30,329 and the mid-August highs at 30,195 have flipped polarity and should cushion any pullback.
The short-term outlook stays bullish while the index holds above the 18 September low at 29,372, while the medium-term trend remains bullish above the 16 September low at 28,753.
The tech-led gains come as major central banks adopt a more hawkish tone. After the Fed raised rates and warned that the fight against inflation was not over, markets are pricing in roughly a 56% chance of another US rate increase in October.
That backdrop has kept the dollar close to a seven-week high even as equities climb. The yen, meanwhile, has come under pressure from the wide interest-rate differential and dovish dissent at the Bank of Japan, trading near a three-week low of ¥157.47 per dollar.
Source: IG
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