Nasdaq 100 and S&P500: Tech Stocks Face Oil-Driven Inflation Forecast

Stocks Enter Monday Flat but Oil Is Already Running the Story

June E-mini S&P 500 Index futures and June E-mini Nasdaq-100 Index futures are both edging lower early Monday after last week closed at record highs. The April jobs number was strong, earnings delivered, and the indexes finished the week in good shape. Now oil is back above $97 and Trump called Iran’s latest peace proposal “totally unacceptable.” The optimism from Friday did not survive the weekend headline.

Technical Outlook

June E-mini Nasdaq-100 Index Futures

June E-mini Nasdaq-100 Index futures are inching lower shortly before the cash market opening on Monday. The market did hit a record high early in the session at 29399.75 before turning lower.

There is no resistance but the early price action suggests a closing price reversal top may be forming. If confirmed, it could lead to the start of a 2 to 3 day pullback, something we haven’t seen since late March.

The current short-term range is 27009.50 to 29399.75. Its midpoint at 28204.75 is the first downside target.

June E-mini S&P 500 Index Futures

June E-mini S&P 500 Index futures are lower as we approach the cash market opening. We did see a new record high at 7420.75 before turning lower. Based on a series of minor swing bottoms, three potential support pivots are lined up at 7310.25, 7276.00 and 7250.00. These levels will move up if a new high is made.

Watch 7419.00 near the close. A trade below it will indicate the presence of sellers, setting up the possibility of a potentially bearish closing price reversal top.

June E-mini Dow Jones Industrial Average Futures

Dow futures are slightly lower early Monday. A trade through 50238 will signal a resumption of the uptrend with 50932 the next key target. A minor pivot at 49423 is the first potential support level. With the main trend up, buyers could come in on a test of this level. If it fails to hold, sellers could come in hard with 48686 a potential target.

Oil Is Back and the Market Is Paying Attention

June WTI crude oil climbed back above $97 a barrel Monday. Spot Brent crude oil pushed above $103. Trump rejected Iran’s latest peace proposal over the weekend and called the response “totally unacceptable.” Israeli Prime Minister Netanyahu added over the weekend that the conflict is “not over.” Both headlines hit before the opening bell and the energy trade responded immediately.

The energy sector was one of the strongest areas in premarket trading. Valero Energy, Occidental Petroleum, ConocoPhillips and Devon Energy all moved higher as traders positioned for stronger profits tied to rising crude prices. Oil is up roughly 40% since the conflict started earlier this year. Another leg higher from here puts real pressure on inflation, consumer spending and the Fed’s ability to move on rates. I’ve watched the market shrug off oil headlines before. Monday felt different. The geopolitical risk is not fading and the market is starting to price that in more seriously.

Semiconductors Are Still Running

Micron Technology jumped again in premarket trading after a strong week. Advanced Micro Devices also traded higher. The semiconductor rally is still intact and traders are still rewarding every name tied to AI infrastructure. The Nasdaq has been running on this theme for months and nothing Monday changed that. The question I keep coming back to is how long chipmakers can keep carrying the index higher when oil is simultaneously pressuring inflation and the broader macro picture. Last week the answer was easy. This week it gets more complicated.

Intel added to its recent gains as traders continue to watch for signs the turnaround is holding. Sony climbed after announcing a partnership with Taiwan Semiconductor Manufacturing Company focused on image sensor production. The AI infrastructure buildout keeps pulling in new names and new deals and the market keeps rewarding them.

Earnings and Biotech Moving Before the Bell

monday.com surged in premarket after reporting stronger than expected revenue growth tied to AI platform demand. Constellation Energy also traded higher after topping revenue and earnings estimates. On the downside Mosaic fell after disappointing quarterly results. Fertilizer names do not get the benefit of the doubt right now when the market is focused on technology and energy.

Biotech was active before the open after reports tied to hantavirus cases sparked speculation about vaccine development. Moderna jumped after saying it was conducting early stage research connected to the virus. Health officials described the public risk as low but traders pushed money into vaccine related names anyway. I’ve seen this pattern before in biotech. A headline emerges, momentum builds fast, and the move has nothing to do with fundamentals. Trade it carefully if you trade it at all.

CPI and PPI Are the Week’s Real Events

The Consumer Price Index and Producer Price Index both report this week and those numbers matter more than any single earnings report on the calendar. Last week’s strong jobs number lowered expectations for Fed easing. Another round of firm inflation data locks in higher for longer even further and Treasury yields move up with it. The energy sector loves that environment. Technology stocks have been tolerating it. If CPI and PPI both come in hot on top of oil running back toward $100, the calculus for growth stocks changes and the rotation into energy and defensives accelerates.

What to Watch

Watch 7419.00 on the June E-mini S&P 500 near the close. A trade below it confirms the potentially bearish closing price reversal top that started forming early Monday. That triggers the first real 2 to 3 day pullback since late March. The midpoint at 28204.75 on the June E-mini Nasdaq-100 is the first downside target if the selling picks up. On the June E-mini Dow Jones Industrial Average 49423 is the first support level to watch. Lose it and 48686 comes into view fast. Oil and CPI are the drivers this week. The chart levels are the guardrails.

More Information in our Economic Calendar.