Where we are: The Nasdaq 100 futures are trading up a solid 2.31% d/d at 30197.25, recovering from a softer open in European hours where the cash index dipped to 29220.06. Overnight gains were driven by a strong rebound in Asian and European tech, building on positive sentiment from US chipmaker Micron’s blowout earnings. We’re currently sitting well above yesterday’s New York close, with immediate resistance likely around the 30300-30400 zone.
What’s driving it: The primary driver remains the resurgent AI trade, ignited by Micron’s stellar results and forward guidance, which has effectively calmed fears of a slowdown in the sector. This is being amplified by a generally supportive US macro backdrop, as evidenced by the Fed’s recent stress test confirming bank resilience, suggesting continued credit availability. While the US 2Y yield has softened by 8bp to 4.16% over the last two days, the 10Y real yield is ticking higher, presenting a slight headwind for gold but not yet derailing the tech rally.
- Micron’s earnings beat and strong revenue outlook have provided a significant boost to the AI narrative, underpinning tech valuations.
- The Federal Reserve’s stress test results indicate a robust banking sector, which should support lending and broader economic activity.
- Speculative positioning in Nasdaq 100 futures shows a net non-commercial short of -8,908 contracts, indicating a crowded short stance with potential for a squeeze on positive surprises.
NY session focus: All eyes are on the 08:30 ET high-impact US Core PCE Price Index and Final GDP print. A Core PCE print at or below the 0.3% forecast would further solidify the narrative of cooling inflation, likely extending the tech rally and potentially testing the 30500 level. Conversely, an upside surprise in PCE could quickly unwind today’s gains, especially given the crowded short positioning. President Trump’s speech at 20:30 ET is a wildcard, but unlikely to be a primary driver for the NDX unless it carries significant economic policy implications. The trade that’s working is long tech, particularly semiconductor-related names. The pain trade would be a sharp reversal on a hawkish PCE surprise, forcing shorts to cover into a falling market.