Semiconductor Strength Fuels Nasdaq 100 Advance

A rally in chipmakers and artificial intelligence stocks provided the momentum for the Nasdaq 100 to start the week in positive territory. The technology-heavy index gained approximately 0.6% on Monday, closing at 25,550 points. Although trading volumes were predictably light in the pre-holiday period, investors demonstrated a clear preference for growth-oriented equities.

The broader market environment offered a stable foundation for the advance. The yield on the benchmark 10-year U.S. Treasury note saw a modest increase of two basis points to 4.17%, a move insufficient to pressure technology shares significantly. A moderate pullback in the U.S. dollar provided a tailwind for large exporters within the tech sector. Furthermore, the CBOE Volatility Index (VIX) dropped more than 11% to fall below the 15 level, signaling a calm and optimistic mood among traders as the year draws to a close.

From a chart perspective, the index's upward trajectory remains firmly intact. It continues to trade well above its key moving averages, with the 50-day line near 25,170 points trending higher. The Relative Strength Index (RSI) reading of 61.7 sits comfortably in bullish territory, indicating strength without yet reaching overbought conditions. The technical pattern suggests a bull flag formation that has resolved to the upside. The next significant resistance level is the all-time high near 26,000 points, while initial support at 25,400 was successfully tested at the open. Maintaining this support zone is viewed as key for the continuation of the uptrend.

Sector Performance: A Tale of Two Trends

Monday's session presented a stark divergence in sector performance. Semiconductor and AI-related names dominated the leaderboard, while heavyweight constituents from other industries acted as a drag.

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The chip sector was notably strong. Micron Technology surged over 4% higher after industry analysts issued optimistic commentary regarding memory chip demand for the coming year. Oracle continued its recent rally, advancing 3.3% on the back of its previously reported robust cloud revenue figures.

This strength was offset by weakness elsewhere. Apple, due to its substantial weighting in the index, exerted notable downward pressure with a 1% decline to $270.83. Netflix shares retreated 1.2% to $93.29, a move attributed to profit-taking following its recent gains. Shares of Starbucks and Honeywell also trended lower.

In a separate development, Tesla reached a new record high of $488 per share, buoyed by favorable legal news.

Outlook for the Holiday-Shortened Week

Trading activity is expected to remain subdued in the coming sessions. The most significant economic data releases, including GDP and inflation figures, are scheduled for later in the week. In this context, market observers anticipate the Nasdaq 100 may continue to oscillate within a range between 25,400 and 25,600 points as liquidity thins further ahead of the Christmas holiday.