Nasdaq 100 Rides a Wave of Holiday Season Optimism

NASDAQ 100 US6311011026

A pre-Christmas surge is energing for the technology-heavy Nasdaq 100 index, as investors are greeted with a rally driven by unexpectedly resilient U.S. economic data and renewed vigor in the semiconductor sector. The index is once again approaching its record levels. Wall Street sentiment is buoyed by a perceived "Goldilocks" economic scenario—characterized by solid growth alongside moderating inflation—even as software stocks face pressure from acquisition news.

A clear divergence is evident within the index's components. Semiconductor giants are leading the charge, while software names experience a pullback.

• Micron Technology (MU): Shares surged approximately 7%, propelled by positive analyst commentary regarding memory chip pricing and the sustained demand for AI components in data centers.
• Nvidia (NVDA): The heavyweight contributed significantly to the index's advance with a 3% gain. Reports of resumed chip shipments to China provided fresh momentum for the stock.

Conversely, the software segment displayed weakness. ServiceNow (NOW) shares declined after the company announced its acquisition of cybersecurity firm Armis for $7.75 billion. Investors reacted with the typical caution seen in large-scale deals, focusing on valuation concerns and the potential for near-term earnings dilution. Tesla (TSLA) also took a brief pause, retreating slightly from recent highs as some traders locked in profits.

Robust Economic Data Fuels the Rally

The upward move on Tuesday was primarily supported by a revision to the U.S. Gross Domestic Product (GDP) figures for the third quarter. The U.S. economy expanded at an annualized rate of 4.3%, substantially surpassing consensus estimates of 3.2%. When paired with moderate inflation data—the Personal Consumption Expenditures (PCE) price index at 2.8%—this strengthens the market's conviction that the Federal Reserve can achieve its desired "soft landing" without stifling economic growth. Although yields on the 10-year U.S. Treasury note edged higher to 4.17%, they failed to dampen the appetite for growth-oriented equities.

Technical Perspective and Trading Outlook

From a technical standpoint, the bullish trend remains firmly intact. The index is trading well above its key moving averages. The Relative Strength Index (RSI), hovering around 55, is approaching the higher end of its range but does not yet signal immediate overbought conditions. The next target for bullish traders is the December peak near 25,835 points, with the psychological 26,000 level looming beyond.

Trading volume is expected to thin significantly during today's shortened Christmas Eve session, with U.S. equity markets closing at 1:00 p.m. Eastern Time. Morning focus will rest on the weekly jobless claims data, which may offer further clues about labor market resilience. Barring any unexpected geopolitical developments, trading is likely to be subdued, with buyers aiming to defend the 25,500-point level.