Chip Stocks Fuel Nasdaq 100’s Weekly Rally

NASDAQ 100 US6311011026

A robust quarterly report from the semiconductor industry and receding inflation concerns are providing the Nasdaq 100 with significant momentum heading into the weekend. Market sentiment for growth-oriented assets is being further bolstered by growing expectations for future U.S. interest rate cuts.

The current positive environment extends beyond corporate results. Weaker-than-anticipated U.S. inflation data released this week has solidified market predictions that the Federal Reserve will commence its rate-cutting cycle in 2026. This scenario, leading to lower or steadily declining Treasury yields, is particularly favorable for technology growth stocks. Future earnings from these companies see higher valuations in a lower-rate environment.

This supportive macro climate aligns with a generally positive trend across U.S. equity markets. The tech-heavy Nasdaq 100 is outperforming more traditional indices like the Dow Jones. European markets, including the DAX and FTSE, are showing a more cautious, sideways trend to end the week. Asian markets had previously closed mostly higher, providing additional tailwinds for the global session.

Semiconductors Lead the Charge

The technology-focused index is building on gains from the previous session. Driving today's optimism is Micron Technology. The memory chip specialist's shares are posting double-digit percentage gains in pre-market trading after the company delivered quarterly results that substantially surpassed market expectations.

This positive surprise is lifting broad segments of the sector. Companies like Lam Research and Broadcom are benefiting from the improved sentiment within the chip space. Other technology names, including AppLovin and Constellation Energy, are also registering notable advances.

Concurrently, a clear sector rotation is underway as investors shift capital from more defensive areas into higher-growth tech equities. Semiconductors and information technology are leading the gainers, while classic "safe-haven" sectors are lagging.

Technical Perspective on the Index

From a technical standpoint, the Nasdaq 100 has reclaimed a significant level. The zone around 25,000 points, which recently acted as resistance, now serves as short-term support. The index is trading near its 50-day moving average, which sits just above the current price, while remaining comfortably above its 200-day line. This configuration signals a structurally intact upward trend with limited short-term overextension.

The Relative Strength Index (RSI) reading of approximately 55 points resides in neutral territory, suggesting room for further price appreciation if buying interest persists. Attention now turns to the overhead resistance area around 25,200 points. A decisive break above this level could pave the way for a retest of recent record highs.

The index concluded yesterday's session near the 25,000-point mark, maintaining a clear upward trajectory. It shows an approximate 18% gain over a twelve-month horizon and a rise of just over 19% since the start of the year. Current levels are only a few percentage points away from the 52-week high, indicating the recent consolidation phase has been relatively moderate.

Outlook for the Session Close

Two key factors will be decisive for the remainder of today's trading. First, whether the strong reaction in the semiconductor sector holds and is reflected in sustained high trading volume. Second, whether the 25,000-point level can be defended if any profit-taking emerges.

A closing price for the Nasdaq 100 near or above the short-term resistance around 25,200 points would signal a strong finish to the trading week. Such a move would refocus market attention squarely on the recent record highs.