A mixed batch of U.S. economic indicators prompted early volatility, but the Nasdaq 100 managed to stage a recovery during the morning session. The key question for traders is whether this rebound can be sustained above critical technical levels.
Market Dynamics and Key Drivers
The trading day opened with the index dipping below its prior close. This initial weakness was triggered by data from the U.S. Commerce Department showing fourth-quarter GDP growth came in at 1.4%, notably lower than the anticipated 2.5%. Simultaneously, the PCE inflation reading for the quarter was reported at 2.9%, exceeding forecasts. This combination of sluggish growth and persistent price pressures pushed the Nasdaq 100 to an intraday low of 24,762.50.
Buyers emerged at that level, propelling the index to a high of 24,926.40. However, the broader environment remains challenging. Rising bond yields and ongoing geopolitical tensions in the Middle East continue to temper risk appetite. Market activity signals caution: trading volume is running 12% above its 20-day average, and the VIX volatility index holds above 20.
Individual Stocks Paint a Mixed Picture
Alphabet Inc. provided significant support, with its shares climbing 1.54% to $308.19. BioMarin Pharmaceutical also ranked among the top performers, advancing 2.57% following positive updates from its clinical trial pipeline.
After an early dip, NVIDIA recovered to trade in positive territory, gaining 0.1% to $187.96. This move offered stability to the semiconductor sector.
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In stark contrast, Booking Holdings fell sharply against the trend, plummeting 6.15% to $4,007.45. Despite the company surpassing earnings expectations, its profit outlook for the coming year appeared more cautious. The earnings report also highlighted growing analyst concerns that AI-driven competition could erode the company’s business moat. This significant decline acted as a drag on the broader index recovery.
Technical and Macroeconomic Crosscurrents
From a technical perspective, the Nasdaq 100 faces the challenge of reclaiming a position above its 50-day moving average. The defense of the 24,760 zone provided near-term support, with the area around 24,930 now acting as the next resistance hurdle. The Relative Strength Index (RSI) reading of 48 sits in neutral territory, indicating a lack of strong directional momentum.
The bond market continues to influence equity sentiment. The yield on the 10-year U.S. Treasury note rose by 2 basis points to 4.09%, complicating the outlook for future interest rate paths. Meanwhile, WTI crude oil stabilized around $66.09 following yesterday’s increase linked to U.S.-Iran tensions. The U.S. Dollar Index showed little movement.
Positioning in the derivatives market reflects a defensive stance. Option activity shows increased put buying on SPY and QQQ ETFs with March expirations. Conversely, block trade data indicated buying interest in Google and Microsoft shares.
As the afternoon session progresses, the 24,800 level emerges as a critical threshold. Maintaining a position above it would suggest the market has absorbed the early economic data shock. However, a rise in the 10-year yield above 4.10% or fresh geopolitical headlines could quickly reignite volatility before the closing bell.
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