Tech Stocks Hold Steady Ahead of Pivotal Fed Meeting

NASDAQ 100 US6311011026

As the trading week concluded, the technology-heavy Nasdaq 100 index demonstrated notable resilience. Investors, having received a crucial piece of awaited data, brushed aside lingering inflation concerns and political uncertainties, allowing the prevailing upward trend to continue. With one major macroeconomic question seemingly answered, market attention has now pivoted decisively toward the Federal Reserve's upcoming policy decision.

Friday's session began with a tug-of-war between investor anxiety and relief. The tension was ultimately resolved by the release of the delayed Personal Consumption Expenditures (PCE) price index. The core PCE figure, which is the Fed's preferred inflation gauge, showed a year-over-year increase of 2.8%, landing precisely in line with consensus forecasts.

This confirmation was exactly what equity markets required. The report cleared the "data fog" that had persisted due to the recent government shutdown, providing much-needed clarity for the bond market. Treasury yields held steady as participants now view a 25-basis-point interest rate cut in the coming week as virtually assured.

Corporate Developments Drive Individual Stock Action

Beyond monetary policy, specific corporate news generated significant moves. The media sector was a focal point: Warner Bros. Discovery shares advanced after details emerged regarding a partial asset sale to Netflix. The market interpreted this deal as a vital strategic move for the debt-laden company. Conversely, Netflix's stock faced downward pressure as investors weighed the transaction's high cost and potential integration challenges.

Ulta Beauty delivered a standout performance. The retailer's quarterly earnings significantly surpassed expectations, prompting an upward revision to its full-year outlook. This sent its shares soaring by double digits, simultaneously broadcasting a positive signal about consumer sentiment that lifted related stocks like Lululemon. The day was less favorable for MicroStrategy, whose shares felt the impact of a soft patch in Bitcoin's price.

Technical Backdrop Remains Constructive

Closing at 25,711.19 points, the Nasdaq 100 secured a weekly gain of just over one percent, reinforcing a positive technical picture. The index now trades a mere 1.4% below its 52-week high, underscoring the sustained optimism among bullish investors.

Key technical indicators currently support the potential for further gains without flashing immediate overbought signals. The Relative Strength Index (RSI) sits at 55.2, positioning it in a neutral-to-slightly-bullish range. Furthermore, the 50-day moving average, situated near 25,266 points, offers solid support should any near-term pullbacks materialize.

All eyes are now firmly fixed on the Federal Open Market Committee (FOMC) meeting scheduled for December 10-11. Provided the central bank follows through with the anticipated rate cut and refrains from issuing unexpectedly hawkish commentary regarding the labor market, a test of the index's all-time high appears to be the most likely path forward.