The Nasdaq 100 showed resilience with modest gains following Trump’s re-election, as investors anticipate lower taxes and deregulation.
Key Points
- Wall Street’s optimism centers on potential Republican control, boosting key sectors.
- Nasdaq tech stocks gained, while renewable energy lagged due to expected policy shifts.
- Treasury yield rise may affect valuations, with a Fed rate cut likely today.
NASDAQ 100 Daily Price Analysis – 07/11/2024
The Nasdaq 100 has shown remarkable resilience following the unexpected re-election of Donald Trump, with markets digesting the implications of a renewed “Trump trade” era.
Following Wednesday’s close at 20,841.4, the index is seeing modest gains in early trading, with today’s current level at 20,862.4, marking a slight increase of +0.10%. This reflects ongoing investor confidence amidst expectations of lower taxes, deregulation, and a favorable stance towards U.S. businesses under Trump’s administration.
Wall Street’s Reaction to Trump’s Win
The Nasdaq’s ascent reflects broader market optimism driven by Trump’s win, which aligns with lower corporate tax rates and a push towards deregulation. The market’s rapid response indicates that a Trump victory was not fully priced in, with investors now positioning for a “red sweep” scenario, anticipating that both the House and Senate may come under Republican control. This sentiment is bolstered by hopes of an economic environment favorable to U.S. corporations, with sectors like financials, energy, and consumer discretionary rallying significantly.
Sector Movements and Trump Trade Resurgence
Financials led Wall Street’s gains on Wednesday, with the sector up 5.5% and the KBW bank index experiencing its best day in four years. In addition, the energy and industrial sectors each rose around 3%, benefiting from expectations of reduced regulation.
On the other hand, sectors sensitive to interest rates, like real estate and utilities, saw declines as inflation concerns mounted, which could dampen rate-cut expectations.
The Nasdaq 100, heavily weighted in tech and growth stocks, reacted positively as big players like Tesla surged by 14% after Elon Musk’s public support for Trump. Stocks tied to cryptocurrency, energy, and traditional industries like prison operations also posted gains, as investors positioned themselves for the next phase of Trump’s policy agenda.
Conversely, renewable energy shares saw declines, with investors anticipating fewer regulatory incentives for green energy initiatives under a Trump-led administration.
Treasury Yields and Valuation Pressures
U.S. Treasury yields surged post-election, with investors trimming expectations for further rate cuts. The Federal Reserve is widely expected to announce a 25-basis-point cut to the benchmark interest rate, though the yield rise has the potential to weigh on stock valuations. This dynamic could impact Nasdaq 100’s growth stocks if investors shift focus towards companies expected to benefit more directly from Trump’s policies, such as those in financial and energy sectors.
Key Economic Data and News to Be Released Today
Several significant economic events are scheduled for today that could impact the Nasdaq 100:
- Unemployment Claims: The latest data on initial jobless claims will be released at 8:00 PM UTC. A decrease in claims could signal a strengthening labor market, potentially boosting investor confidence.
- Federal Funds Rate Decision: The FOMC is expected to announce its decision on the federal funds rate today. A 25-basis-point cut is anticipated, which could influence market liquidity and borrowing costs.
- FOMC Statement and Press Conference: Following the rate decision, the FOMC will release a statement and hold a press conference at 8:30 PM UTC. Investors will closely monitor these for insights into the Fed’s economic outlook and future policy direction.
NAS100 Technical Analysis – 07/11/2024
Nas 100 is clearly bullish. For some couple of days now, price has been breaking market structure to the upside while trending significantly above the 200 EMA. However, price may be retracing today, losing a bit of the bullish momentum.
Price has struggled and failed to break above the current key resistance level. Additionally, the RSI shows that price is overbought and may experience a deep pullback, possibly to the 200 EMA before the bullish trend can continue again. This expectation may provide a short-term counter-trend short opportunity for sellers today.
NASDAQ100 Fibonacci Key Price Levels 07/11/2024
The technical setup suggests a cautious approach as the index is testing critical support levels. In view of this, here are some critical support and resistance levels to pay attention to:
| Support | Resistance |
| 20408.4 | 20875.6 |
| 20264.0 | 21020.0 |
| 20030.4 | 21253.6 |
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