Nasdaq 100: Tech Stocks Lead US Indices Higher After Soft PPI Today

Nasdaq Futures Push Higher as Soft PPI and Tech Strength Set Up a Run at February Highs

S&P 500, Dow Jones Industrial Average and Nasdaq Composite futures are all positive on the opening. The PPI came in well below expectations this morning and futures jumped on it. Traders have been sitting on inflation fears since the Middle East conflict pushed oil higher. This morning’s number gave them a reason to let those fears go, at least for today.

Tech Is Leading and the Breadth Is Building

This morning’s early rally is broader than yesterday’s that was based mostly on semiconductors. Oracle is extending strong gains from the prior session. Intel keeps winning. Credo Technology is surging on acquisition news. AI and cloud names are pulling the broader market higher.

Bitcoin is above $74,000 on short covering and that’s lifting crypto-linked stocks and adding another layer to the tech bid. Amazon is up on a major acquisition announcement and Ford Motor Company is gaining on an analyst upgrade. With many big tech stocks up early, it’s easy to see the bulls have the momentum.

Financials Are the Weak Spot

JPMorgan Chase beat expectations and still sold off after cutting its outlook. Wells Fargo declined after results failed to impress. That’s the message from the two biggest banks going into earnings season. Good numbers aren’t enough if the guidance disappoints. That’s a real headwind for financials and it’s worth watching whether it bleeds into broader market sentiment as more banks report this week.

What to Watch at the Open

The PPI data is supportive and the tech names are set up well to continue the rally. Additionally, the geopolitical noise is in the background for now. But this rally needs follow-through. Volume has to confirm the move and the financial weakness can’t spread.

Technical Outlook

June E-mini Nasdaq-100 futures are trading higher shortly before the cash market opening. The continuation of yesterday’s reversal bottom has put the market in a position to challenge the February 25 main top at 25705.00. If strong buyers show up on the move, it could launch an acceleration into the major top at 26580.50, the last stop before the all-time high at 26754.75.

On the downside is a cluster of support formed by an intermediate retracement zone at 25308.75 to 24858.25, the 200-day moving average at 25095.49 and the 50-day moving average at 24875.25.

That’s the bullish setup in a nutshell, now all we need is for momentum to continue with better-than-average volume.

Yesterday we saw a rally fueled by a surge in semiconductors. I’m hoping this sector was the rabbit and all the other sectors follow along today because we need to see some breadth at the record high for stability.

More Information in our Economic Calendar.