Nasdaq 100: Tech Earnings Loom Large as Market Sentiment Wavers – Analysis

Market Volatility Persists as Tech Earnings and Fed Meeting Loom

U.S. stock indexes opened with mixed performance on Monday, reflecting ongoing market volatility. The Nasdaq showed gains, while the Dow weakened and the S&P 500 struggled to maintain early advances.

At 15:10 GMT, the Dow Jones Industrial Average is trading 40463.33, down 126.01 or -0.31%. The S&P 500 Index is at 5455.20, down 3.90 or -0.07% and the Nasdaq 100 is trading 17367.06, up 9.18 or +0.05%.

Tech Sector Braces for Earnings

This week’s tech earnings reports are poised to significantly impact market direction. Industry giants Microsoft, Meta Platforms, Apple, and Amazon are scheduled to release their quarterly results. The technology sector, which has recently experienced a cooling trend, saw a slight decline of 0.09% according to the sector watch chart.

Key Stock Movements

Notable individual stock movements included Tesla, which surged 3.2% following an analyst upgrade. Chipmaker Nvidia continued its strong performance, rising 2.1% on AI-driven demand. Conversely, Boeing shares dropped 1.8% after announcing further delays in its 737 MAX deliveries.

Federal Reserve Meeting in Focus

Traders are closely monitoring the upcoming Federal Reserve meeting, with a new policy statement expected on Wednesday. While no interest rate cut is anticipated this week, market participants will be scrutinizing the Fed’s communication for hints about potential moves at the September meeting.

Small-Cap Stocks Rally Continues

The iShares Russell 2000 ETF (IWM) gained nearly 0.9% in premarket trading, indicating ongoing momentum in small-cap stocks. This trend is supported by expectations of future interest rate cuts and an improved inflationary environment, which typically benefit smaller companies with higher financing costs.

Sector Performance

The consumer discretionary sector led gains with a 1.06% increase, while energy stocks faced the largest decline at 1.66%. Communication services and utilities also showed positive movement, up 0.67% and 0.01% respectively.

Cryptocurrency Developments

Bitcoin approached the $70,000 mark, rising 1% to $68,864.91. The cryptocurrency market is reacting to recent political developments, including former President Trump’s speech at the Bitcoin Conference and potential policy shifts signaled by Vice President Harris’ outreach to the crypto industry.

Market Forecast

The short-term outlook remains cautiously bullish, with a focus on broader market participation beyond mega-cap tech stocks. However, historical data suggests the current pullback may not have run its course. Traders should stay alert to tech earnings reports and the Fed’s statements this week, as these factors are likely to drive market direction in the coming days.

Technical Analysis

E-mini S&P 500 Index futures are edging lower shortly after the opening on Monday after flipping to the weakside of the 50-day moving average at 5504.78. This is new intraday resistance, but it could turn into an upside breakout point if buyers return.

If the selling pressure continues then look for a possible test of a pivot at 4563.25. This is the last potential support before last week’s low at 5432.50.

Today’s early price action suggests traders are still grappling with uncertainty ahead of the Fed and large-cap earnings this week.