Nasdaq Forecast: QQQ rises, boosted by chipmakers

US futures

Dow futures 0.15% at 39362

S&P futures 0.23% at 5230

Nasdaq futures  0.33% at 18236

In Europe

FTSE 0.19% at 7933

Dax +0.73% at 18400

• Equities rise after mixed messages from the Fed
• US durable goods orders rose 1.4% vs -6.9% previously.
• Nvidia & chip stocks look to further gains
• Oil holds onto yesterday’s gains

Fed speakers diverge & chip makers gain

US stocks are heading for a positive open, lifted by chipmakers and big tech and as investors weigh up Federal Reserve commentary ahead of Friday’s inflation data.

Atlanta Fed president Raphael Bostic reiterated yesterday that he sees just one rate cut by the Federal Reserve this year owing to the resilience of the US economy.

However, highlighting the divergence within the Fed, Fe President of Chicago, Austan Goolsbee, adopted a tone in line with last week's Federal Reserve meeting, saying three interest rate cuts this year were possible.

The spotlight remains on Friday’s core PCE reading, the Federal Reserve's preferred gauge for inflation. This reading, along with Federal Reserve chair Jerome Powell's speech on Friday, could provide further clues about the timing of the first Fed rate cut and the number of cuts this year.

After a couple of months of sticky inflation data, the Fed and the market will want to see a continuation of the trajectory toward the 2% target. However, the fact that the Fed raised its 2024 inflation forecast and maintained three rate cuts this year means that there is some wiggle room.

Today, attention will be on US durable goods, which rose 1.4 after falling over 6.9% in the previous month. US consumer confidence data is out later. A resilient economy could support Bostic's view that the Fed may not be able to cut as many times as guided for, which could pull stocks lower.

Corporate news

Nvidia is set to rise by 1% as it looks to surpass its record high. Other chip stocks are pointing to a stronger start, with Micron Technology and SMCI rising on an AI-inspired rally.

Tesla is set to rise 3% on the open after announcing a free month’s trial of its driver-assist technology, Full Self Driving, according to Elon Musk.

Apple remains under the spotlight after being hit by several consumer lawsuits accusing the iPhone maker of monopolizing the market. The lawsuits, representing millions of consumers, mirror the DoJ's.

Nasdaq 100 forecast – technical analysis.

The Nasdaq is hovering just below the all time high of 18468 reached last week. A small gain could see fresh all-time highs. The price is testing the rising trendline support, which could expose the 20 SMA at 18115. The first major support is at 17800 the March low. A break below here could see the price head towards 17160 the February low.

FX markets – USD falls, EUR/USD rises

The U.S. dollar is slipping lower for a second straight day amid profit-taking as it moves away from the monthly high reached last week.

EUR/USD is rising after German consumer confidence ticked higher to -27.4 up from -28.8. A slight improvement in sentiment comes amid rising wage expectations, but willingness to spend declined, highlighting the weak outlook for consumption. Meanwhile, ECB chief economist Philip Lane said yesterday that he saw wage growth slowing in the eurozone region, paving the way for a rate cut from the central bank.

GBP/USD is holding steady after UK grocery inflation cools to 4.5%, down from 5.3%, and after hawkish comments from Bank of England policymaker Catherine Mann. Mann warned that the market expects more rate cuts this year than the Bank of England will likely deliver. She said that given the strong wage growth, it would be unlikely that the Bank of England would cut rates ahead of the ECB or the Fed.

Oil holds gains amid supply concerns 

Oil prices are holding steady and hold on to yesterday's 2% gains amid ongoing supply concerns and owing to a weaker dollar.

Supply worries have been driving oil prices higher in recent sessions after Ukraine attacked Russian energy facilities, which, according to Goldman Sachs, have taken 900,000 barrels per day of capacity offline.

Furthermore, the Russian government ordered companies to reduce output by 2 million barrels per day to comply with OPEC+ production targets.

On the demand side, expectations that the Federal Reserve will cut interest rates three times in 2024 are keeping the demand outlook bright, although core PCE inflation data on Friday could be key in confirming the Fed's future path for interest rates.

Looking ahead, API inventory data is due later, following a 1.5 million barrel draw the previous week.