The Nasdaq 100 index in the United States has stocks trading near the 2024 highs, but higher interest rates bring caution.
NAS 100 – Daily Chart
The Nas 100 was trading at 21,818 on Thursday after a small dip on bond prices. The all-time highs are in close sight, with support already tested once at 20,781.
Tech stocks saw a small loss on Thursday as US bond yields reached a six-month high. Part of the market rally has been driven by the expectation of swift Federal Reserve rate cuts but that was dampened at the previous week’s FOMC rate decision.
The Fed has telegraphed only two rate cuts in 2025, but traders may be less sure about the outcome for the economy. The expectation for deregulation from Donald Trump’s new administration may also be why traders are ignoring the Fed’s update. The markets are pricing the chances at 9% for a -25 bp rate cut at the January 28-29 FOMC meeting.
The US stock market was boosted by Asia as Chinese stocks closed slightly higher due to speculation that China may sell a record 3 trillion yuan ($411 billion) of special Treasury bonds in 2025 to support the economy. Trump’s tariff threat may ensure that the PBoC does take some form of action.
The year ahead will be reliant on the AI rally and it remains to be seen if big tech firms can continue to pump billions into graphics chips from the likes of Nvidia.