Nasdaq 100 Hovering Near Weekly Highs in a Volatile Week
As shown on the 4-hour chart of the Nasdaq 100 (US Tech 100 mini on FXOpen), the index stood around the 21,600 level this morning, near the weekly high that formed at Mondays open.
This suggests that the tech-stock index has almost fully recovered from the decline triggered by the launch of AI from the Chinese startup DeepSeek. According to media reports:
Experts have pointed to signs that the Chinese startup used a technique known as distillation in simple terms, this means that DeepSeeks model extracted knowledge from more advanced models such as ChatGPT. In other words, this is not about innovation but rather an unfair practice.
Nassim Taleb believes that the sharp drop in NVDA shares is only the beginning of a potential market downturn inflated by AI-driven expectations. Further declines could be more significant than what we witnessed on Monday.
Apart from news surrounding DeepSeek, traders were also focused on earnings reports from major corporations (which we will cover in detail in separate articles):
Tesla (TSLA) is holding above $400 in pre-market trading today, despite earnings per share falling short of expectations. Meanwhile, company executives believe that Trumps policies could negatively impact Teslas operations.
Microsoft (MSFT) shares fell by more than 4%, Meta Platforms (META) surpassed $700 per share in post-market trading for the first time, and IBM surged by approximately 9%.
Additionally, the fundamental backdrop became even more eventful following yesterdays Fed updates, which, however, contained no surprises:
As expected, interest rates remained unchanged.
According to The Wall Street Journal, the Fed has entered a Wait-and-See phase, showing less confidence that inflation will continue to decline.
The Nasdaq 100 (US Tech 100 mini on FXOpen) chart reveals that the price:
Tested a key support line (marked in blue) at the weekly low.
Remains within the red descending channel.
From a bullish perspective, the red channel can be seen as a large-scale correction within the broader uptrend on higher timeframes.
From a bearish perspective, the bearish gap that formed at Mondays open may act as resistance. Whether bulls will be able to overcome this barrier in the near term will depend, among other factors, on the next batch of earnings reports from major tech companies.
Read more: https://fxopen.com/blog/en/oa-nasdaq-100-hovering-near-weekly-highs-in-a-volatile-week/
Text source: Forex Trading Blog
