Nasdaq

After threatening for weeks to generate a sizeable volatility event, the combination of higher bond yields and US dollar looks to have delivered.

US stocks are set to extend losses as investors continue digesting the FOMC meeting. As expected, the Fed left rates on hold at 5.25-5.5%. However, the Fed also signaled to another rate hike this year and less easing next year. While the end of the hiking cycle is in sight, the meeting had a clearly hawkish bias which the market has latched onto. As if on cue, US jobless claims also came in much stronger than expected, supporting the Fed's stance.

The Fed delivered their hawkish hold, sending the US-JP 2-year yield differential to fresh cycle highs ahead of tomorrow’s BOJ meeting. And whilst the risk of verbal intervention remains from the MOF/BOJ, they may not actually intervene if the trend remains orderly. And price action on the USD/JPY daily chart suggests that it is.

US stocks are edging higher ahead of the Federal Reserve interest rate decision. The Fed is expected to leave rates unchanged at 5.25%-5.5%. However, the key focus will be on what comes next. The market is pricing in a 70% probability that the Fed will keep rates unchanged again in November. Yet with inflation still over 2%, resilience in the US economy and oil heading towards $100 the Fed is likely to keep the door open for further hikes if needed.

At the time of writing, US index futures were trading near their session highs, boosted by a small decline in global bond yields. Unsurprisingly, UK yields led the falls, and FTSE led the major indices higher, after UK inflation came in weaker than expected, further boosting speculation that the Bank of England may opt for a “dovish rate hike” on Thursday.

With a significant amount of earnings generated overseas, and whose valuations are susceptible to rising risk-free rates, the Nasdaq 100 stands out as one market that looks particularly vulnerable.

US stocks are set to open modestly lower amid a cautious market mood, as investors look ahead to Wednesday's Federal Reserve interest rate decision. The Fed is not expected to hike interest rates but after CPI jumped by the most in 14 months in August, the Fed could still maintain a hawkish stance. Meanwhile, the UAW strike continues keeping automobile makers in focus and chipmakers could stay under pressure on rising demand concerns.

Given the driver of the Nikkei’s performance, keep an eye on the Nasdaq’s performance given it continues to bump up against downtrend resistance on an almost daily basis.

The tech heavy Nasdaq is set to lead the gains on Wall Street. Optimism surrounding Nvidia's earnings on Wednesday and a slight easing in treasury yields are helping to lift stocks.

The commitment of traders (COT) report shows how large speculators are positioned across futures markets on the CME exchange.

The major US stock averages tried to stage a bit of a bounce shortly after the case markets opened. The recovery looked like was driven by short-covering, although some would point to news that US industrial output jumped 1% in July, which was better than expected, as a reason behind the slight recovery. However, good data is not necessarily good news for stocks since it increases the likelihood that the Federal Reserve will keep monetary policy contractionary for longer.

Whilst China’s deflating CPI number brings hopes of weaker inflation elsewhere, a quick at the chart reminds us that inflation spends very little time in negative territory.

The Nasdaq 100 has now put in a short-term “lower high” and “lower low,” suggesting that the year-to-date uptrend may be vulnerable to a deeper pull back in the coming weeks...

USD/JPY hit a bout of volatility when the BOJ announced that they will aim to control the ‘flexibility’ of its 10-year target rate of +/- 0.5%, and allow the yields to rise above the ceiling by a “certain degree”. This is not a widening of the band as such, but a more relaxed approached to controlling the bond yield around it.

The Nasdaq 100 is approaching its biggest hurdle of earnings season over the next two weeks...

Despite yesterday's big drop, there’s no particular cause for bullish concern on the Nasdaq 100 yet from a technical perspective...

Stocks are pointing to a modestly higher start as earnings remain the focus. So far earnings have broadly been above consensus, which combined with last week's cooler inflation reading means that there is growing optimism that the US may be able to avoid a hard landing, even after the Federal Reserve's aggressive hiking cycle. Earnings from Netflix and Tesla are due after the close, both stocks have seen impressive gains YTD.