Where we are: Nasdaq futures are currently trading at 30027.50, down 0.28% after ranging between 29766.75 and 30135.75 overnight. The cash Nasdaq 100 closed yesterday at 26674.73 and is likely to open weaker, with futures below the overnight high. Key support lies around the 29750 level in futures, while resistance is around 30150.
What’s driving it: US yields are softening slightly this morning, with the 10-year at 4.479%, down 2.2bp. This, in turn, is lending very modest support, but the overall tone is cautious ahead of a crucial data dump at 08:30 ET. Focus will be on Core PCE, Prelim GDP, and Unemployment Claims; any surprises here could trigger a sharp move, given the market’s sensitivity to inflation and growth data. Further weighing on sentiment are continued concerns over AI sustainability after hawkish comments from FOMC members, a factor amplified by upward PCE price pressures.
- Jefferson spoke overnight on global economic developments.
- The 2s10s spread is at 0.48%, but has flattened slightly over the past 24 hours, a sign that the market may be thinking about rates remaining higher for longer.
- Speculator positioning in Nasdaq 100 futures is crowded short at the 4th percentile with net non-commercial contracts at -1,420, a squeeze risk on a positive surprise.
NY session focus: Today’s session will hinge on the 08:30 ET data releases. Strong PCE or GDP prints would likely pressure Nasdaq, pushing yields higher and potentially triggering a short squeeze given the crowded positioning. Conversely, weaker data could fuel a rally. Keep an eye on the DXY, currently at 99.13; further dollar weakness could provide some support. The trade that’s working is fading rallies into resistance near 30150, while the trade at risk is chasing breakouts without confirmation from the data. The pain trade for Nasdaq is a surprisingly hawkish inflation number combined with robust GDP, forcing a rapid repricing of Fed expectations.