just now
- Middle East ceasefire talks and plunging oil prices ease inflation fears, strengthening the Fed's dovish outlook.
- Nasdaq 100 (NAS100) breaks into all-time highs above 22,234.1 as tech momentum and rate cut bets fuel risk-on appetite.
- S&P 500 (SP500) eyes the 6,150 level while holding key FVG support, mirroring Nasdaq's bullish structure.
The U.S. stock market is soaring to new highs with Nasdaq 100 leading to pack in an All-Time High level followed by S&P 500 & Dow Jones, fueled by a wave of geopolitical tensions, oil prices plunge, and investors ramp up bets on upcoming Federal Reserve rate cuts. With the S&P 500 testing the 6,600 level and the Nasdaq 100 printing a new All-Time High risk appetite has returned in full force-led by surging tech giants, improved earnings sentiment, and a broad-based rally across key sectors.
Key Drivers Behind the Rally in U.S. Indices
1. Middle East Ceasefire Uncertainty, Sends Oil Lower
A surprise ceasefire between Israel and Iran reduced global risk sentiment, sent oil prices plunging more than -12% from its high at $77.50 level, and pulled inflation expectations lower-boosting equity confidence.
But this ceasefire negotiations is still on the table as Israel & Iran has not yet followed-through with the prior resolution.
Dow, Nasdaq, and S&P surged as oil-driven inflation fears faded.
2. Fed Rate Cut Bets
Dovish signals from Fed officials and falling oil prices have markets now pricing in a potential rate cut by September.
Tech-heavy Nasdaq outperformed as lower yields boosted growth stocks.
3. Strong Earnings & Tech Momentum
Mega-cap tech names (NVIDIA, Apple, Microsoft) and upbeat earnings (Uber, Carnival, Coinbase) continue to drive market strength.
All major indices gained, led by the Nasdaq’s breakout.
Technical Outlook
With the ease in oil (WTI) supply risks and dovish Fed due to disinflationary numbers, Nasdaq has now created a new All-Time High at 22,234.1 level.
Nasdaq Bullish Scenario
Since Nasdaq is now on All-Time High Levels, we are seeing strength. With risk-on sentiment has managed to stay, we are looking for Nasdaq to create new highs above the ATH level.
- Break above the ATH Level with sustained moved piercing through the 22,250 level
- Retest of the 4-Hour FVG resting between 22119.6-22181.7
As long as we see follow-through, strength on Nasdaq is still in-tact.
Nasdaq Bearish Scenario
We can’t also disregard the fact that the ATH level could pose risks for reversal since we are already at a very premium level. As long as we get a confirmation of weakness and shift in market structure by creating lower highs and lower lows, a bearish sequence, we could see strength to dissipate and Nasdaq pulling back below the 4-Hour FVG.
- Failed sustained move to the upside
- Invalidation of the 4-Hour FVG by closing below
- Bearish sequence in-effect
S&P500 Bullish Scenario
Same case that we could anticipate with S&P 500. Since Nasdaq and S&P 500 are correlated, we’d like to look for the same trajectory on S&P.
If we are looking for an upside continuation, we like the 4-Hour FVG to hold the line.
- FVG between 6079.8-6092.1 remains intact
- Bullish sequence reaching the ATH level
- Does not break below 6060 level.
S&P500 Bearish Scenario
With ATH looming around the corner, we cannot disregard a bearish scenario. If S&P fails to break strong with a strong momentum candle followed by bullish candles, this could pose risk for S&P to reach the All-Time High levels. Either we see a reversal or just a pause for a breather before S&P bounces back to the upside.
- Invalidation of 6079.8-6092.1
- Break below 6060 level
- Bearish Sequence
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