Nasdaq faces potential wipeout of post-Fed gains as oil climbs and rate hike bets rise

FUNDAMENTAL OVERVIEW

The Nasdaq pushed into fresh record highs after the Federal Reserve indicated a less aggressive interest rate path than traders had anticipated, signalling limited enthusiasm for further tightening.

A sharp decline in crude prices, driven by rising hopes of de-escalation and an earlier resolution to the conflict, also bolstered risk appetite and kept the index bid at new peaks. However, at the UN General Assembly, Donald Trump dampened those expectations by reiterating that the US would negotiate with Iran only after the November elections.

Risk sentiment began to sour as oil prices recovered, pulling the Nasdaq lower. The bearish pressure intensified on Wednesday after the US Flash PMIs revealed stronger-than-expected growth, prompting another hawkish repricing that pushed Treasury yields to new highs. All else equal, the Nasdaq could erase all its gains since the FOMC meeting.

Attention will stay on rate expectations and Middle East developments. Should markets perceive an earlier end to the war or a surprise breakthrough, oil prices could fall, triggering a dovish repricing and supporting the Nasdaq.

If conditions stay unchanged or escalate further, crude oil could remain supported at elevated levels and pressure equities as rate hike bets climb.

NASDAQ TECHNICAL ANALYSIS – DAILY TIMEFRAME

The Nasdaq set a new all-time high this week but failed to hold gains as negative macro events drove prices down. A major upward trendline defines the bullish structure on this timeframe.

On a pullback, buyers would be expected to support the trendline with a defined risk below it, aiming for a rally to fresh record highs. Sellers, meanwhile, would seek a break lower to extend the correction toward 27,203, with the swing low at 28,800 as the first target.

NASDAQ TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME

NASDAQ TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME

On the 1-hour chart, a minor downward trendline defines the bearish momentum. Sellers would likely use that trendline with a defined risk above it to press prices to new lows. Buyers would look for a break above to strengthen bullish bets toward record highs. The red lines indicate the average daily range for today.

UPCOMING CATALYSTS

Today brings the Trump-Xi meeting and US Jobless Claims data, though the main focus remains on US-Iran developments and interest rate expectations.