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Markets kicked off the week with caution, as traders prepared for a packed agenda. The Nasdaq was in focus, with futures slipping 0.11% as the U.S. presidential race neared its conclusion.
The tight race between Kamala Harris and Donald Trump has put markets on edge, with both candidates neck and neck in the polls, adding a layer of uncertainty over U.S. economic policy.
Adding to the complexity, this week also brings critical central bank decisions, including from the Federal Reserve, which is widely expected to implement a 25-basis-point rate cut.
Markets have nearly priced in this move, especially as recent data points to cooling inflation but strong consumer spending. This decision will be particularly impactful for tech stocks on the Nasdaq, which benefit from a lower interest rate environment due to their reliance on growth funding.
Picture: NAS100 shows a recovery above the 20,000 level, with steady upward momentum, as seen on the VT Markets app.
From the charts, we can see the pattern of Nasdaq’s recent bullish movement, closing at 20,120.55 with an intraday high of 20,151.05 and a low of 19,973.55. The gradual upward trajectory with price action climbing back above the key 20,000 psychological level, could act as significant support if the upward trend continues.
Nasdaq futures were initially under pressure after mixed earnings last week, with Facebook’s Meta falling 4% and Microsoft sliding 6%, despite strong earnings reports. Traders seemed wary of the impact that AI investments could have on profitability.
However, Amazon’s surprise 5.3% after-hours rally brought some optimism, adding $104 billion to its market cap after beating profit expectations.
These swings in major tech names reflect the uncertainty facing the Nasdaq, with volatility expected to remain high ahead of the election.
Meanwhile, the National People’s Congress (NPC) meeting in China this week could also impact Nasdaq-listed companies with significant exposure to China. With potential announcements of a massive stimulus package, the meeting will be closely watched.
Chinese stocks showed mild gains, with the CSI300 up 0.2%, while the Hang Seng climbed 0.4% on Monday. A strong push in China’s economy could benefit U.S. tech companies reliant on Chinese consumer demand.
Oil prices added another layer of intrigue for the Nasdaq. Brent crude futures rose 1.6% to $74.28 per barrel after OPEC+ delayed a planned output increase.
Rising oil prices could ripple through costs for tech companies with large supply chains and heavy logistics, adding pressure on margins.
See also: Oil Climbs on Gulf Tensions, OPEC+ Outlook
Yet, a stabilised oil market might help ease fears of inflation, which would support the Fed’s expected rate cut—a net positive for growth-focused Nasdaq stocks.
Aside from the election, Friday’s U.S. nonfarm payrolls report could influence the Fed’s tone and rate decision next week. Economists expect 113,000 new jobs for October, although forecasts range widely.
Nasdaq traders will be watching for any surprises, as a strong job report could complicate the Fed’s rate cut decision, possibly curbing gains in tech stocks if rates are kept higher.
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