Nasdaq Forecast: QQQ stocks fall after stronger ADP payrolls & ahead of Powell's speech

US futures

Dow futures -009% at 39140

S&P futures -0.22% at 5196

Nasdaq futures -0.36% at 18054

In Europe

FTSE -0.37% at 7909

Dax 0.10% at 18310

• ADP Payrolls beat forecasts with 184k vs 140k previously
• Fed Chair Powell to speak
• Intel slumps on weak results
• Oil rises to a 5-month high as OPEC+ leaves production unchanged

Stocks fall as rate views dominate

US stocks point to a weaker open, extending losses from the previous session. This comes after stronger-than-expected data and ahead of more Federal Reserve speakers, Including Fed Chair Jerome Powell.

ADP payrolls came in stronger than expected at 184K in February, up from 140K and beating expectations of 148K. This also marks the fastest pace of hiring since July 2023, Indicating the ongoing resilience of the US economy.

The ADP report is considered to be a precursor for the labour department's more comprehensive non-farm payroll report on Friday. The stronger-than-expected data sets a positive tone for Friday's NFP, where economists forecast growth of 200k jobs in May.

The data comes after solid factory orders and Jolts jobs openings data and ahead of US ISM services PMI later today. The services PMI is expected to tick higher and comes after the ISM manufacturing PMI unexpectedly returned to growth.

U.S. data continues to surprise to the upside, which raises some questions over whether the Federal Reserve will be able to cut rates three times this year.

Recent Federal Reserve speakers have had mixed views, but they broadly agree that the Fed is in no rush to take action.

Looking ahead, Federal Reserve chair Jerome Powell will be speaking. Investors will be keen to hear his take on the US economy and the outlook for interest rates. A more hawkish-sounding Jerome Powell could pull stocks lower.

Corporate news

Tesla is extending its selloff after dropping almost 5% in the previous session after Q1 deliveries fell, marking the first drop in quarterly deliveries in almost four years. Q1 deliveries Fell 8.5% across the year and 20% from the previous quarter. The share price is down around 30% so far this year, and the data suggests that Tesla's pricing strategy is having a waning impact.

TSMC is set to open lower after the Taiwan earthquake prompted the semiconductor manufacturer to evacuate some of the factory areas, which could result in production delays. TSMC supplies many large companies, including Apple, Nvidia, and Qualcomm, with semiconductors to use in their products.

Intel is pointing to a weaker open after the chip maker disclosed deepening operating losses for its semiconductor manufacturing business. That unit booked $7 billion in operating losses for 2023 on sales of $18.9 billion.

Nasdaq forecast – technical analysis.

After hitting a record high of 18466 earlier in the month, the price is easing lower, breaking below the 20 SMA, which had guided prices northwards. Sellers will need to defend 17800, the March low, to prevent further declines. Below here, 17160, the February low, comes into play. Meanwhile, buyers will look to push the price back up towards 18466 and fresh all-time highs.

FX markets – USD flat, EUR/USD rises

The U.S. dollar is holding steady as it hovers just below its 4 1/2-month high reached earlier in the week, despite stronger-than-expected US data, which would support the Federal Reserve keeping interest rates high for longer.

EUR/USD is rising despite the cooling of eurozone inflation by more than expected, to 2.4%. In March, this was down from 2.6% in February and lower than forecasts of 2.5%. While the data shows that inflation is on the right trajectory towards the ECB's 2% target, service sector inflation remained sticky at 4%. Still, the data still points to a June rate cut.

GBP/USD is trading unchanged amid a quiet day for major UK economic announcements. UK house prices rose by 1.6% in March, adding to gains of 1.2% in the previous month. Mortgage approvals also increased ahead of forecasts, pointing to a recovery in the UK housing market.

Oil rises to a 5-month high.

Oil prices rose to a fresh five-month high after supply risks Intensified and after OPEC+  ministers made no changes to current production cuts.

The OPEC+ group made no changes to policy after deciding to extend current output cuts until June, when the next full OPEC ministerial meeting will take place.

Meanwhile, ongoing attacks by Ukraine on Russian oil refineries threaten to take even more of the country's processing capacity offline.

Investors are also worried that the ongoing conflict in the Middle East could escalate after Iran vowed revenge against Israel following an attack on military personnel. An escalation of the conflict in the Middle East, particularly involving more oil-producing countries, could impact supply. Iran is the third largest producer in OPE.

Meanwhile, the oil inventory data from the API showed a 2 million barrel draw in the previous week, while gasoline inventories also declined. EIA official data will be released later today and is expected to show that inventories fell by 2.3 million barrels last week.