Nasdaq 100: Nvidia, Oracle Lead Tech Stocks in US Indices Rally Today

Stocks Rally at Midday as Tech Leads and Oil Drop Eases Inflation Fears

U.S. stocks are trading higher at midday Tuesday with the Nasdaq Composite leading the way up 1.7%. The S&P 500 is up about 1% and the Dow Jones Industrial Average has gained more than 300 points. Investors are focused on growth and willing to look past the geopolitical noise for now.

Technical Outlook

Technically, the S&P 500 Index (SPX) cash market is sharply higher at the mid-session. The benchmark index is at 6956.90, putting it within striking distance of the all-time high at 7002.28. Minor support is the swing bottom at 6790.02. The next important support zone is 6760.71 to 6670.68. The major support area is the space between the 50-day moving average at 6760.71 and the 200-day moving average at 6670.68.

The Nasdaq Composite Index (IXIC) cash market is also in a runaway trade after gapping higher on the opening. The market is now soaring toward the all-time high at 24019.99 with no resistance between the current price at 23591.85 and the all-time high. The minor support is Monday’s swing bottom at 22795.82. The major support cluster is a combination of a long-term 50% level at 22532.88, the 50-day moving average at 22493.99 and the 200-day moving average at 22444.29.

Tech Is Running the Show

The rally is coming from one place. Technology. Semiconductors and software are leading and pulling the Nasdaq higher with them. Communication services and consumer discretionary are following along. Oracle is extending its rally. Nvidia and Palantir are adding to recent gains. Crypto-linked stocks including Robinhood are moving higher as Bitcoin climbs. Travel stocks are catching a bid from lower fuel costs. The breadth is better than yesterday and that’s what the bulls needed to see.

Energy Is the Drag, Banks Are Mixed

Energy stocks are down more than 2% as oil prices fell sharply on signals that U.S.-Iran diplomatic discussions could resume. Lower oil is good for inflation but it’s hitting the energy sector hard today. Bank stocks are adding to the pressure. JPMorgan slipped after lowering its outlook and Wells Fargo fell after results failed to impress. The Dow is lagging the Nasdaq because of those two sectors. CarMax dropped sharply despite beating earnings expectations as investors focused on declining year-over-year performance and a pause in share buybacks. Dell and HP are lower on uncertainty around potential deals in the PC space.

What to Watch Into the Close

Tech is running this market today and if it fades, the rally fades with it. Oil is the wild card. Any headline out of the Middle East that changes the diplomatic picture could flip energy prices fast and shift the mood. I’m watching the Nasdaq into the close. As long as it holds the gains, the S&P 500 has a shot at the all-time high at 7002.28 before the week is out.

More Information in our Economic Calendar.