The Nasdaq 100 Index jumped as investors piled back into technology stocks after a relatively dovish statement from a senior Federal Reserve official, who is among those aiming to replace Jerome Powell. It jumped to $24,840, up sharply from last week's low of $23,830.
Top Technology Earnings Ahead
The Nasdaq 100 Index jumped after Christopher Waller, a top Federal Reserve official, maintained that he supported another interest rate cut in the December meeting, mirroring John Williams statement on Friday.
Waller, who is one of the candidates shortlisted to replace Powell, has long maintained that interest rates were significantly higher than ideal as that labor market was showing some cracks, with the unemployment rate rising gradually.
The index also jumped as Tesla, one of its top constituent companies surged after Elon Musk revealed that it had built its AI chip. While Tesla's sales have slowed, investors believe that the company will succeed because of its self-driving technology.
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AI companies were the biggest gainers on Monday, with Broadcom jumping by 10%, bringing its market capitalization to over $1.7 trillion. Other companies like Micron, Marvell, Palantir, AppLovin, and Alphabet were among the top gainers on Monday.
Looking ahead, the Nasdaq 100 Index will react to some important technology company earnings scheduled for the next two days. Analog Devices, Dell, Autodesk, Workday, Zscaler, and NetApp will publish their financial later today, Nov..25. These results will provide more color on whether the AI industry is still doing well.
Chances are that these companies will publish strong results as data compiled by FactSet shows that most companies published better-than-expected results, with the average earnings growth being 13.5%.
Nasdaq 100 Index Technical Analysis
The daily timeframe chart shows that the Nasdaq 100 Index has rebounded from this month's low of $23,868 to nearly $25,000.
It has moved above the 50-day and 100-day Exponential Moving Averages (EMA), a sign that conditions are improving.
The index has remained above the Ichimoku cloud indicator, which is a positive sign. There are signs that it is slowly forming a double-top pattern whose upper side is at its all-time high of $26,143 and its neckline is at $23,868.
While a double-top is a risky pattern, it means that may rebound by about 5% to hit that level. However, a drop below the support at $23,868 will invalidate the bullish Nasdaq 100 Index forecast.
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