NAS100 Hits Record Ahead of NVIDIA but RSI Diverges
The tech-heavy index runs its best month of the year, extending the advance to new record highs. After last week’s CPI moderation, markets strengthened their bets for two rate cuts by the Fed this year, beginning in June. NAS100 now eyes the psychological 19K mark.
On the other hand, the disinflation process has slowed this year and Fed officials have turned cautious around a pivot, adopting a higher-for-longer narrative, while the hawkish commentary continued this week from various policymakers. On the technical side, the RSI did not follow prices higher, in a divergence that creates risk for a pullback towards the EMA200 (black line). Daily closes below it, would pause the bullish bias, but that would need strong catalyst.
Even if a pullback ensues, the path of least resistance is higher. NAS100 has looked past the Fed’s cautious shift, largely due to the generative AI boom and investors now await Wednesday’s results by NVIDIA, its enabler and main beneficiary. After February’s last report, the stock had jumped more than 12% and had lifted NAS100 with it, so there is potential for volatility.
NVIDIA expects new record revenues due to AI demand and growth to the tune of 235% y/y. This would mark a small slowdown in pace and markets will want to see if it can continue to post eyewatering numbers, or if cracks will begin to appear.
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On the other hand, the disinflation process has slowed this year and Fed officials have turned cautious around a pivot, adopting a higher-for-longer narrative, while the hawkish commentary continued this week from various policymakers. On the technical side, the RSI did not follow prices higher, in a divergence that creates risk for a pullback towards the EMA200 (black line). Daily closes below it, would pause the bullish bias, but that would need strong catalyst.
Even if a pullback ensues, the path of least resistance is higher. NAS100 has looked past the Fed’s cautious shift, largely due to the generative AI boom and investors now await Wednesday’s results by NVIDIA, its enabler and main beneficiary. After February’s last report, the stock had jumped more than 12% and had lifted NAS100 with it, so there is potential for volatility.
NVIDIA expects new record revenues due to AI demand and growth to the tune of 235% y/y. This would mark a small slowdown in pace and markets will want to see if it can continue to post eyewatering numbers, or if cracks will begin to appear.
Stratos Markets Limited (fxcm.com/uk):
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Stratos Europe Ltd (trading as “FXCM” or “FXCM EU”), previously FXCM EU Ltd (fxcm.com/eu):
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Stratos Trading Pty. Limited (fxcm.com/au):
Trading FX/CFDs carries significant risks. FXCM AU (AFSL 309763). Please read the Financial Services Guide, Product Disclosure Statement, Target Market Determination and Terms of Business at fxcm.com/au
Stratos Global LLC (fxcm.com/markets):
Losses can exceed deposits.
Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this video are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed via FXCM`s website:
Stratos Markets Limited clients please see: fxcm.com/uk/market-commentary/
Stratos Europe Ltd clients please see: fxcm.com/eu/market-commentary/
Stratos Trading Pty. Limited clients please see: fxcm.com/au/market-commentary/
Stratos Global LLC clients please see: fxcm.com/markets/market-commentary/
Past Performance is not an indicator of future results.
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