NASDAQ 100 at $14,800 Amid Inflation Data and Fed Rate Decision – Bullish Momentum?
A moderation in inflation has led to the S&P 500 and Nasdaq Composite reaching their third consecutive record highs. The S&P 500 rose
A moderation in inflation has led to the S&P 500 and Nasdaq Composite reaching their third consecutive record highs. The S&P 500 rose by 0.9%, while the Nasdaq Composite increased by 1.5%. Conversely, the Dow Jones Industrial Average declined slightly by 36 points, or 0.1%.
Market Reaction to Inflation Data
Yields on Treasury notes fell, with the 2-year yield dropping to 4.748% and the 10-year yield to 4.294%.
This decline in yields followed the release of May’s consumer price index (CPI), which remained flat month-over-month, defying expectations of a 0.1% increase.
Despite these gains, stocks later retreated, and the Dow turned negative after the Federal Open Market Committee (FOMC) indicated only one 25 basis point interest rate cut by year-end, contrary to the three cuts previously forecasted.
Fed Chair Powell’s Remarks
Federal Reserve Chair Jerome Powell provided limited clarity in his press conference, emphasizing uncertainty about future data. Powell noted that while the recent CPI data was positive, sustained cooling in inflation is necessary before the Fed considers rate cuts.
Federal Reserve Chair Jerome Powell talks about the pain of inflation on Americans and the necessity of maintaining interest rates at their current level: pic.twitter.com/BnCRCs1lNJ
— Conservative War Machine (@WarMachineRR) June 12, 2024
He highlighted the Fed’s readiness to maintain current rates if inflation persists but also indicated a willingness to respond to unexpected changes in the labour market or inflation trends.
Corporate Earnings and Market Trends
In corporate news, Oracle (ORCL) and Rubrik (RBRK) are set to release their quarterly earnings today. CrowdStrike (CRWD) and KKR (KKR) saw significant gains of 7.3% and 11.2%, respectively, following their inclusion in the S&P 500 index.
Conversely, Advanced Micro Devices (AMD) dropped by 4.5% after a downgrade from Morgan Stanley to a Hold rating. European markets opened higher as investors anticipated the Federal Reserve’s policy decision and upcoming U.S. inflation data.
The U.S. 10-year Treasury yield was around 4.45%, and WTI crude oil futures were near $77.68 per barrel.
⚠️BREAKING:
*U.S. 10-YEAR TREASURY YIELD FALLS 10 BASIS POINTS AFTER SOFT CPI REPORT
🇺🇸🇺🇸 pic.twitter.com/o8NMvNjrhN
— Investing.com (@Investingcom) June 12, 2024
NASDAQ 100 Price Forecast
The NASDAQ 100 (NDX) currently shows bullish potential. Key price levels to monitor include a pivot point at $14,800. Immediate resistance is at $15,100, with further resistance levels at $15,300 and $15,500. Support levels to watch are $14,500, $14,300, and $14,100.
Technical indicators suggest a mixed outlook. The Relative Strength Index (RSI) is at 57, indicating moderate momentum. The 50-day Exponential Moving Average (EMA) stands at $14,700, supporting a bullish trend as the current price is above this level.
In conclusion, the NASDAQ 100 is poised for further gains if it sustains above the $14,800 pivot point. However, a break below this level could signal a potential downturn.
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