"The current state of the Nasdaq 100 reflects a delicate balance between hopes of monetary easing and fears of economic slowdown. Futures are pointing to slight gains, with the index up 0.12%, signalling that liquidity is still flowing into technology stocks, albeit cautiously. This behaviour suggests that investors are betting more on rate cuts than on any real improvement in economic fundamentals. In my view, this divergence puts the index at a difficult crossroads, as any reversal in Fed expectations could trigger a sharp correction."
"Weak labour data leaves the door open for rate cuts, but at the same time highlights fragile growth. Relying on "economic weakness as a bullish driver" is a dangerous contradiction, since such dynamics cannot last indefinitely. With job revisions confirming the loss of one million positions as expected, I see this as a clear signal that the Fed has been late to act and may have to respond more aggressively. That could lift Nasdaq in the short term but undermine confidence in the medium run."
"From a corporate perspective, the picture is mixed: Nvidia and Apple are under pressure, while Tesla and Broadcom benefit from sector-specific drivers. This divergence shows that Nasdaq's rally is no longer broad-based as it was in 2023-24, but increasingly selective. Historically, such transitions often mark the early stages of a topping cycle. For investors, I believe the focus should be on companies with"
Nasdaq 100 sits between hopes for monetary easing and fears of economic slowdown, producing cautious gains as futures point to modest upside. Market moves reflect bets on rate cuts rather than clear economic improvement, leaving the index vulnerable to a reversal in Fed expectations. Weak labor data keeps the possibility of cuts open while exposing fragile growth, making reliance on economic weakness as a bullish driver unsustainable. A small September rate cut would be measured but would not address labor-market deterioration; a larger cut would signal deeper distress and could trigger short-lived highs followed by sharp pullbacks. Corporate performance is increasingly selective across sectors.
Read at London Business News | Londonlovesbusiness.com
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