Nasdaq 100 Holds Its Nerve as Oil, Yields and a Hawkish Fed Stack the Odds

Tech index rises 0.3% despite oil above $92 and 66% odds of Fed hike; Nvidia's MediaTek investment and AI deals lend support.

The technology benchmark closed Monday at 29,456.97 points, a modest 0.3 percent advance that belied the weight of the news cycle pressing down on Wall Street. With Brent crude spiking above $92 a barrel and the probability of a September Federal Reserve rate hike climbing past 65 percent, the index's resilience stood in sharp contrast to the Dow Jones and S&P 500, both of which surrendered more ground on the day.

The geopolitical trigger came from fresh military exchanges between the US and Iran, with reports of missile strikes on American bases in Jordan sending the international oil benchmark to intraday highs above $92 while West Texas Intermediate pushed past $85. For a tech-heavy index historically sensitive to both energy costs and rising borrowing expenses, the combination would normally prove uncomfortable. Ten-year Treasury yields responded in kind, touching 4.778 percent on Tuesday — the loftiest level in 19 months.

Yet the index found support from an unlikely corner: the semiconductor and artificial-intelligence complex. Nvidia lent a hand after announcing a $3.5 billion investment in convertible bonds issued by MediaTek, while simultaneously backing the $35 billion cloud partnership between Anthropic and Lambda with chip deliveries. Those headlines helped offset the macro drag and kept the Nasdaq 100's losses shallower than those of its peers.

Warsh's Jackson Hole Message Reshapes the Rate Calculus

The more persistent pressure on tech valuations, however, continues to emanate from the Federal Reserve. Chair Kevin Warsh used his Jackson Hole appearance to make clear that inflation progress remains insufficient to justify pausing further monetary tightening. His remarks have already moved the market: traders now price roughly a 66 percent chance of a rate increase at the Fed's mid-September meeting, a sharp jump from the 35 percent probability assigned just weeks earlier.

Treasury Secretary Bessent has pushed back on the hawkish narrative, arguing that current price pressures stem primarily from a supply shock while core inflation stays contained. That view has not carried the day in the trading pits. JPMorgan's trading desk responded to Warsh's speech by downgrading its stance on US equities from bullish to "tactically cautious," citing not only rate uncertainty but also seasonal September weakness and the risk of a pullback in overheated AI names.

The calendar now offers two potential inflection points: Friday's August jobs report and the consumer price index due September 11. Both will feed directly into the rate expectations that have become the market's dominant driver.

A Month of Whiplash Between AI Euphoria and Rate Fears

The pattern of the past several weeks has been one of violent oscillation. Late last week, Nvidia's surprisingly upbeat revenue forecast reignited the AI trade and lifted the index's heavyweights into the weekend. Within days, Warsh's hawkish rhetoric sent sentiment into reverse. Earlier in August, hot inflation data on the 26th dampened risk appetite ahead of Nvidia's numbers, only for the chipmaker to deliver the month's sharpest upward move the following day.

Geopolitics has compounded the volatility. On August 24, the index fell as investors weighed fresh tensions with Iran alongside the earnings calendar and another inflation print. The week before, rising bond yields and disappointing Walmart results pressured the consumer sector, while fading hopes for US-Iran rapprochement pushed oil and yields higher and revived inflation concerns.

Technical Picture Holds Despite the Noise

For all the turbulence, the index's technical underpinnings remain intact. At 7.5 percent above its 200-day moving average with a relative strength index of 52.6, the benchmark shows neither overheating nor acute weakness. It sits roughly 1.1 percent above its 50-day average and 4.2 percent below the record close of 30,762.20 points set on June 3. The longer-term trajectory still reads positively: a 17 percent gain year-to-date and 26 percent over the trailing twelve months.

Near-term attention now shifts to the earnings calendar as a sentiment barometer for the broader tech complex. Dell reports quarterly results Tuesday, with analysts projecting revenue growth of around 50 percent to $44.48 billion. HPE follows Wednesday, expected to post a roughly 30 percent increase to $11.96 billion. Both are core beneficiaries of the AI infrastructure buildout, and their numbers may offer clues about whether the sector's momentum can withstand the macro headwinds.

The September jobs report looms as the next decisive test. Should it come in hot, the market's already-elevated rate expectations could climb further, tightening the squeeze on high-multiple tech names. A softer print might offer relief — but with oil above $90 and the Middle East situation unresolved, the path of least resistance for volatility remains higher.