Nasdaq 100 Forecast: QQQ rises & is set for a weekly gain

US futures

Dow future 0.27% at 39500

S&P futures 0.3% at 5230

Nasdaq futures 0.16% at 18159

In Europe

FTSE 0.70% at 8439

• Dax 0.84% at 18775
• Hopes of rate cuts persist after yesterday's jobless claims
• US earnings season has supported stocks
• Oil rises across the week

Rate cut hope helps stocks after Thursday's jobless claims

US stocks are heading for a higher open, extending gains from the previous session on rising optimism surrounding monetary easing and after a solid earnings season.

The three leading US indices rose on Thursday, with the Dow Jones posting its seventh straight day of gains—its best winning streak since December. The index is on track to gain 1.8% this week, while the S&P 500 is set to rise 1.7% and the NASDAQ 1.2%.

The mood in the market is upbeat after Thursday's larger-than-expected increase of weekly jobless claims, which, combined with Friday's softer-than-expected nonfarm payroll reading, raised hope that the US labor market is cooling and the Federal Reserve could start cutting interest rates this year.

Last week, the Federal Reserve left rates unchanged and ruled out the next move being a rate hike, although Federal Reserve officials this week have warned over persistent inflation, which may mean that rates need to stay higher for longer.

According to the CME Fed Watch tool, the market is pricing in a 50% probability that the Fed will cut rates by 25 basis points in September.

Attention will now turn to US inflation data next week for further clues over the timing and possible scale of a fed rate hike.

Several Fed speakers, including Fed presidents Lorie Logan, Neel Kashkari, and Austin Goolsbee, are also due to speak today.

Meanwhile, corporate earnings have also helped lift stock. S&P500 companies that have reported are on track to raise earnings by 7.8%, ahead of expectations of 5.1% growth.

Corporate news

Nvidia is set to open 1.5% higher after Taiwan Semiconductor Manufacturing, the world's largest chipmaker and a supplier of Nvidia, reported an almost 60% jump in sales yearly.

Tesla is set to open 0.8% higher on reports that the Biden administration is preparing more tariffs against Chinese EV rivals

Novavax is set to rise 125% after the biotech firm agreed a deal with French drug maker Sanofi to develop its COVID-19 vaccine from next year.

Nasdaq 100 forecast – technical analysis.

The Nasdaq 100 has extended gains, supported by the RSI above 50 and pushing above 17800 and 18000. Bulls are looking towards the ATH of 18466. Support can be seen at 17800 and 17284, the May low.

FX markets – USD rises, GBP/USD falls

The USD is holding steady but is set to rise across the week after two weeks of losses. The USD has been supported by hawkish Fed commentary despite the weaker jobs data.

EUR/USD is holding steady amid a relatively quiet day for data. The minutes of the latest ECB meeting revealed few surprises, showing that most policymakers wanted to see more evidence of inflation cooling before cutting rates. However, some policymakers were ready to cut rates in April. The ECB is widely expected to cut rates in June.

GBP/USD is rising after UK GDP data was stronger than expected, increasing 0.6% quarter on quarter after the 0.3% contraction in Q4 of 2023. The data suggests that the UK recession was short-lived, and it's the strongest growth since coming out of the pandemic in 2021. Even so, the upbeat growth is unlikely to deter the Bank of England from cutting interest rates in June or the worst of this year.

Oil set for weekly gains.

Oil prices are holding steady below $80.00 a barrel but around track for a weekly gain after data from the US and China pointed to higher demand this week.

Stronger-than-expected import data from China, the world's largest oil importer, coupled with a decline in US crude oil inventories, have boosted optimism that the global oil demand picture is improving.

Looking ahead to next week's US inflation data and China's industrial production figures, they could provide further clues about oil's direction.

Meanwhile, tensions between Israel and Hamas will remain in focus, along with the likelihood of a ceasefire.