Where we are: The Nasdaq 100 futures are consolidating gains after yesterday’s record close. Intraday, the index is trading around 19,045, holding onto the momentum fueled by tech sector strength. This is notably above the prior New York close and within striking distance of fresh all-time highs, showing resilience in the face of slightly rising yields.
What’s driving it: The primary driver remains the robust appetite for AI-related stocks and generally strong earnings from the tech sector, as highlighted by Cisco’s impressive performance. Despite slightly higher Treasury yields, with the 10-year at 4.46% and the 2-year at 4.00%, the market is prioritizing growth prospects in technology. The VIX remains subdued at 17.99, reflecting continued risk-on sentiment despite geopolitical uncertainties.
- Cisco’s 15% premarket surge after earnings, even with planned job cuts, signals the market’s focus on efficiency and profitability in the tech sector.
- The clearance for US firms to ship H200 chips to ten Chinese companies underscores easing trade tensions, further boosting sentiment towards tech equities.
- Speculator positioning in Nasdaq 100 futures remains modestly long at the 2nd percentile, suggesting room for further upside if the rally continues and shorts are forced to cover.
NY session focus: Today’s key event is the 08:30 ET release of Core Retail Sales and Retail Sales data. A weaker-than-expected print could temporarily temper the rally, but strong results could propel the Nasdaq 100 to new highs. Watch for reactions around the 19,000 level as immediate support. A break above 19,100 would target further upside. The trade that’s working is still long tech on dips. The risk is a sharp reversal if the retail sales data disappoints and triggers a broader risk-off move. The pain trade is a continued grind higher, squeezing any remaining shorts and further extending the rally.