Bullish Trend Is Back on for Stocks, As Nasdaq Approaches 20,000

It seems like the July crash has ended for stock markets, with the Nasdaq index closing the day near 20,000 points. At some point, it seemed like the strongest bullish trend on record, was over for stock indices as Nasdaq lost 4,000 points, heading toward 17,000, but it rebounded and after the break of the 50 daily SMA today, the bullish trend is back on.

Nasdaq Chart Daily – The 50 SMA Has Been Broken

On the daily chart, the Nasdaq extended its gains above the critical 19,700 level and broke through the 50 daily SMA(yellow) which confirms the bullish momentum. Sellers were nowhere to be seen and buyers pushed the price to the 19,853. Now buyers will be looking to push the market to new highs, as the extraordinary buying spree in U.S. shares continues, with the Nasdaq leading higher.

Although futures started flat, the day was characterized by a steady stream of bids, culminating in a late surge of buying. The S&P 500 and Nasdaq have now recorded gains for eight consecutive trading days, marking one of their best runs since 2020. With the S&P 500 just 60 points shy of an all-time high, there is speculation that the rally might be reaching its peak. While a brief pullback could be expected, there are currently no clear signs of that happening. In fact, the strong rejection of lower levels suggests a bullish outlook, particularly given the resilience of the U.S. economy and the Federal Reserve’s readiness to cut rates.

Key Drivers and Market Outlook

As market panic subsided in early August, the Nasdaq erased the entire decline that followed the previous ISM Manufacturing PMI report. The first catalyst was the strong U.S. Jobless Claims report on August 8, which eased fears of a weakening labor market, sparked by a lackluster NFP report. Last week’s positive momentum was further supported by even higher Jobless Claims data and an impressive Retail Sales report, signaling that the market is currently focused on growth.

North American Stock Indices at the Close

  • S&P 500: Gained 1.0%, continuing its steady upward trend as broad-based buying lifted the index closer to its all-time highs, signaling strong market confidence.
  • Nasdaq Composite: Rose by 1.5%, outperforming other indices due to significant gains in the tech sector, with major tech giants driving the index higher.
  • Dow Jones Industrial Average (DJIA): Increased by 0.7%, with blue-chip stocks showing resilience and contributing to the overall positive market sentiment.
  • Russell 2000: Advanced 1.0%, reflecting strong performance in small-cap stocks, which benefited from the renewed optimism in the economic recovery and growth outlook.

Nasdaq Live Chart

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Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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