FundamentalOverview

Last week, we got apullback in the Nasdaq as the higher-than-expected inflation readings and aless dovish Powell weighed a bit on the market.

Despite the recent eventsthough, the market’s pricing remained largely unchanged at three rate cuts bythe end of 2025. This might be a signal that the market is now fine with thecurrent pricing, and we will need stronger reasons to price out the remainingrate cuts.

The only bearish reason wehad for the stock market was the rise in Treasury yields. That’s generallybearish only when the Fed is tightening policy though not when yields rise onpositive growth expectations.

Right now, the Fed’sreaction function is that a strong economy would warrant an earlier pause inthe easing cycle and not a tightening. That should still be supportive for thestock market in the bigger picture considering that Trump’s policies include taxcuts and deregulation.

If the Fed’s reactionfunction changes to a potential tightening, then that will likely trigger a bigcorrection in the stock market on expected economic slowdown.

For now, the pullbacks lookas something healthy and opportunities to buy the dips.

NasdaqTechnical Analysis – Daily Timeframe

On the daily chart, we cansee that the Nasdaq pulled into the key trendline and bounced off of it as thedip-buyers stepped in with a defined risk below the trendline to position for arally into a new all-time high. The sellers will need the price to break belowthe trendline to start targeting the 20K level.

Nasdaq TechnicalAnalysis – 4 hour Timeframe

On the 4 hour chart, we cansee that the price is now consolidating around the previous swing level at20788. The buyers will likely pile in around these levels to increase thebullish bets into new highs, while the sellers might want to step in here toposition for a break below the major trendline.

Nasdaq TechnicalAnalysis – 1 hour Timeframe

On the 1 hour chart, we cansee more clearly the recent price action with the strong rebound from thetrendline. There’s not much else we can add here as the buyers will look fordip buying opportunities around these levels, while the sellers will need tobreak below the major trendline to gain more conviction for further downside. Thered lines define the average daily range for today.

Upcoming Catalysts

Tomorrow,we get the latest US Jobless Claims figures, while on Friday we conclude theweek with the US PMIs.