Tech Sector Revival Lifts Nasdaq 100 as Key Data Looms

A renewed appetite for technology shares is providing a boost to the Nasdaq 100, with market heavyweights like Meta Platforms and Nvidia at the forefront of the move. After a brief consolidation, the index is attempting to regain upward momentum, though a cautious tone persists among investors awaiting crucial economic indicators that will test the market's recent optimism.

The current buying interest is being fueled by signs of enduring strength in the U.S. economy. A key driver is the latest jobless claims data, which fell to its lowest level since September 2022. This supports the prevailing narrative of an economic "soft landing," bolstering investor confidence and temporarily sidelining more pessimistic voices that have warned of potential overvaluation in the artificial intelligence sector.

Concurrently, conditions in the bond market are offering additional support. Declining yields on U.S. Treasury bonds are easing pressure on interest-rate-sensitive technology stocks. Market observers interpret this as positioning ahead of the Federal Reserve's upcoming interest rate decision next week, where markets are currently pricing in an 87% probability of a rate cut.

Should investors sell immediately? Or is it worth buying NASDAQ 100?

Leadership from Key Constituents

Two stocks are demonstrating particular strength in the current market environment:

• Meta Platforms: The social media giant is attracting positive attention following reports of stricter cost discipline. Significant resource reductions within its costly Metaverse division are being viewed by the investment community as a sign of improved capital efficiency.
• Nvidia: The chipmaker appears resilient in the face of recent warnings about a potential "AI bubble." For now, the market remains focused on the company's immediate earnings power, choosing to look past longer-term cyclical risks.

Technical Landscape and Key Levels

From a technical analysis perspective, the Nasdaq 100 remains within a defined consolidation range. The index is currently oscillating between a support level at 25,500 points and a resistance level at 25,900 points. Buyers successfully defended the lower boundary on Thursday, with the index closing at 25,581 points. A sustained breakout above the 25,900-point mark is now viewed as necessary to unlock further upside potential toward the 26,400-point area.

Michigan Data to Set the Near-Term Tone

All eyes are now fixed on the imminent release of the University of Michigan's Consumer Sentiment survey. Should the inflation expectations component of the report contain no negative surprises, the rotation back into growth-oriented stocks could accelerate. This would potentially provide the index with stable support leading into the Fed's policy meeting on December 10.