The NASDAQ Struggles to Maintain Short-Term Gains!

– Oil prices are set to rise for the third consecutive week due to escalations in the Middle East.
– The VIX drops by more than 4.11%, indicating increased risk appetite in the stock market. Investors are now focusing on employment data and earnings reports.
– Stocks surge as the latest Core PCE Price Index hits its lowest level in six months.
– The Nikkei225 and NASDAQ are the best-performing indices this week.

USA100 – The NASDAQ Struggles to Maintain Short-Term Gains!

The NASDAQ reached its highest price in over a week as the latest inflation data suggests lower interest rates. The Core PCE Price Index dropped from 0.2% to 0.1%, marking its lowest level in six months. This brings the annual rate down to 2.6%, slightly above the Fed’s 2.00% target.

As a result, the likelihood of an interest rate adjustment next month rises to 10.3%, and to 64.00% for September. This is generally positive for the stock market and continues to support higher risk appetite. The improvement in investor sentiment is also reflected in the VIX Index, which fell more than 4.11% and is approaching previous lows. Additionally, the US 10-Year Bond Yield declined by 15 points, providing further support for the technology sector.

However, investors have three main concerns. First, if oil prices continue to rise, it could trigger panic and more persistent inflation. Second, escalations in the Middle East between Lebanon and Israel could lead to the direct involvement of Iran and Turkey in the conflict, causing supply issues. For now, this situation is keeping investors on edge but not in a panic.

Lastly, investors need to be cautious of the strong decline that followed the rapid price increase after the PCE announcement. Due to bearish volatility, the price is forming a lower low. The key question is whether the price will break the resistance level at $19,871.80. Nonetheless, the two-hour chart indicates a longer-term bullish trend, but most investors would prefer to see all three US indices rise before speculating on upward price movement.

Among the 25 stocks that hold more than a 1.00% weight, only 32% are trading lower. This does not indicate a significant decline, but investors will keep monitoring any changes.