Nasdaq 100 Index Nears $19,500 Amid Political Uncertainty and Rate Cut Speculation

The Nasdaq 100 index has been unable to stop its downward trend and remains under pressure around the 19,522 level, hitting an intraday low of 19,479.

This downturn has been influenced by growing expectations of interest rate cuts, which led investors to shift their portfolios away from tech stocks and into more economically sensitive sectors.

However, the rotation was particularly evident as investors anticipated potential policy changes and the impact of possible changes in U.S. leadership. Additionally, a lacklustre earnings outlook from key tech giants has heightened concerns, contributing to the Nasdaq’s recent struggles.

Political Uncertainty and Its Impact on the Nasdaq Index

On the US front, the recent political developments in the U.S. have significantly impacted the Nasdaq index.

🇺🇲🗳️ Well, things on the political front in the US just got even more interesting with Biden's decision not to run. What a long and winding road that campaign is compared to our recent UK elections. #USpolitics #USelections #Biden

— Mal Fletcher (@malfletcher) July 21, 2024

President Joe Biden’s surprise withdrawal from the 2024 presidential race, along with his endorsement of Vice President Kamala Harris as the Democratic nominee, has introduced substantial uncertainty into the market.

🚨 BREAKING NEWS 🚨

President Biden's unexpected decision to drop out of the 2024 presidential race is a game-changer! This move will have a significant impact on the upcoming election. Stay tuned for more updates. #Biden2024 #2024Election #BreakingNews https://t.co/6blrT0s2TG

— Daily Dose Media (@_DailyDoseMedia) July 21, 2024

This decision raises concerns about Biden’s ability to effectively challenge Republican frontrunner Donald Trump, who has been gaining ground in recent polls.

As investors prepare for possible changes in trade and economic rules, the political turmoil increases market uncertainty and raises doubts about the future economy.

Therefore, the Nasdaq index faces volatility due to President Biden’s unexpected withdrawal from the 2024 race and Kamala Harris’s nomination, fueling uncertainty about future trade policies and economic regulations.

Impact of Anticipated Fed Rate Cut and Weakened Dollar on Nasdaq Index

On the other hand, the Nasdaq has also faced challenges due to the anticipated Federal Reserve rate cut in September. Speculation about the Fed lowering interest rates has led to a weaker U.S. dollar.

This shift, driven by the Fed’s cautious approach and political uncertainty, has reduced the dollar’s appeal as a safe-haven asset. While a weaker dollar can boost U.S. exports, it also raises concerns about the economy, affecting investor confidence.

For the Nasdaq, which is sensitive to both domestic and global economic conditions, the combination of a weaker dollar and potential rate cuts has intensified existing pressures.

This expectation of a rate cut has increased market volatility and uncertainty, causing further declines in tech stocks as investors adjust their strategies in response to changing economic signals.

NASDAQ Price Forecast

The Nasdaq 100 Index is currently trading at $19,522.62, reflecting a 0.34% decline. Key price levels indicate a pivot point at $19,490.76, which serves as a critical level for market direction. Immediate resistance is identified at $19,720.56, followed by $19,972.46 and $20,211.11.

On the downside, immediate support lies at $19,490.76, with further support levels at $19,348.67 and $19,161.65. Technical indicators show the RSI at 34.12, indicating oversold conditions, which could suggest a potential rebound.

The 50-day EMA is at $20,008.91, highlighting a bearish trend as long as the price stays below this level. Overall, the outlook remains bullish above the pivot point of $19,490.76; however, a break below this level could signal a shift to a bearish trend.