Nasdaq surges 1.4% as Powell’s rate-cut outlook fuels tech rally
Press Hub UCapital
Share:
The Nasdaq Composite (IXIC) jumped 1.4% on Wednesday, marking its best Federal Reserve policy day since July as investors cheered Fed Chair Jerome Powell’s confirmation of two expected rate cuts in 2025. The tech-heavy index outperformed, leaving behind concerns over Trump’s tariff threats and shifting focus toward cheaper borrowing costs and potential economic support.
Fed Meeting Sparks Optimism in Risk Assets
The Federal Reserve’s decision to keep interest rates at 4.5% was widely anticipated, but Powell’s press conference provided the real catalyst for the rally. Powell reaffirmed the central bank’s commitment to two rate cuts this year, aiming to counterbalance rising inflation risks from tariffs and slowing economic growth projections. Investors saw this as a green light for risk-on trades, leading to a strong bid across technology stocks.
While Trump’s aggressive trade policies remain a wildcard, the Fed’s stance suggests that monetary easing will remain a priority should economic conditions warrant it. Liquidity-sensitive sectors like tech saw the biggest upside as traders repositioned for a more accommodative policy backdrop.
Biggest Nasdaq Gainers: AI & EVs Lead the Charge
The Nasdaq’s move was broad-based, with leading tech stocks surging:
Nvidia (NVDA) climbed 1.8%, extending gains after CEO Jensen Huang unveiled the latest Blackwell AI chips and two next-generation AI desktop computers. The AI powerhouse, valued at $2.9 trillion, remains a cornerstone of the market’s tech-driven growth.
Tesla (TSLA) rebounded 4.7%, reversing part of its recent 52% drawdown amid a surge in short covering and bargain hunting. Investors also speculated on potential favorable policy shifts for EVs as Powell hinted at maintaining economic support.
Alphabet (GOOGL) gained 2% after confirming a $32 billion acquisition of Israeli cybersecurity firm Wiz, boosting optimism about its cloud security expansion.
Nasdaq’s Technical Outlook: More Upside Ahead?
With two expected rate cuts and the tech sector leading the market recovery, traders are now eyeing key resistance levels in the Nasdaq Composite:
Bullish Scenario: If momentum sustains, the index could challenge the 17,000-17,200 zone, a level that previously acted as a major resistance. A breakout above this could open the door to fresh all-time highs.
Neutral Scenario: Should profit-taking emerge, consolidation around 16,500-16,800 may occur before the next directional move.
Bearish Scenario: A reversal below 16,250 could signal renewed caution, bringing 16,000 and lower support levels into focus.
Conclusion: Tech Rally Has Legs, But Risks Remain
The Nasdaq’s strong response to Powell’s remarks suggests that investors are refocusing on rate cuts rather than trade policy concerns. However, Trump’s tariffs, global economic uncertainty, and upcoming economic data could still inject volatility.
With AI, EVs, and cybersecurity stocks driving gains, the market’s appetite for high-growth tech remains intact. Traders will now look to upcoming U.S. economic releases and corporate earnings for confirmation of this bullish sentiment.
Fed Meeting Sparks Optimism in Risk Assets
The Federal Reserve’s decision to keep interest rates at 4.5% was widely anticipated, but Powell’s press conference provided the real catalyst for the rally. Powell reaffirmed the central bank’s commitment to two rate cuts this year, aiming to counterbalance rising inflation risks from tariffs and slowing economic growth projections. Investors saw this as a green light for risk-on trades, leading to a strong bid across technology stocks.
While Trump’s aggressive trade policies remain a wildcard, the Fed’s stance suggests that monetary easing will remain a priority should economic conditions warrant it. Liquidity-sensitive sectors like tech saw the biggest upside as traders repositioned for a more accommodative policy backdrop.
Biggest Nasdaq Gainers: AI & EVs Lead the Charge
The Nasdaq’s move was broad-based, with leading tech stocks surging:
Nvidia (NVDA) climbed 1.8%, extending gains after CEO Jensen Huang unveiled the latest Blackwell AI chips and two next-generation AI desktop computers. The AI powerhouse, valued at $2.9 trillion, remains a cornerstone of the market’s tech-driven growth.
Tesla (TSLA) rebounded 4.7%, reversing part of its recent 52% drawdown amid a surge in short covering and bargain hunting. Investors also speculated on potential favorable policy shifts for EVs as Powell hinted at maintaining economic support.
Alphabet (GOOGL) gained 2% after confirming a $32 billion acquisition of Israeli cybersecurity firm Wiz, boosting optimism about its cloud security expansion.
Nasdaq’s Technical Outlook: More Upside Ahead?
With two expected rate cuts and the tech sector leading the market recovery, traders are now eyeing key resistance levels in the Nasdaq Composite:
Bullish Scenario: If momentum sustains, the index could challenge the 17,000-17,200 zone, a level that previously acted as a major resistance. A breakout above this could open the door to fresh all-time highs.
Neutral Scenario: Should profit-taking emerge, consolidation around 16,500-16,800 may occur before the next directional move.
Bearish Scenario: A reversal below 16,250 could signal renewed caution, bringing 16,000 and lower support levels into focus.
Conclusion: Tech Rally Has Legs, But Risks Remain
The Nasdaq’s strong response to Powell’s remarks suggests that investors are refocusing on rate cuts rather than trade policy concerns. However, Trump’s tariffs, global economic uncertainty, and upcoming economic data could still inject volatility.
With AI, EVs, and cybersecurity stocks driving gains, the market’s appetite for high-growth tech remains intact. Traders will now look to upcoming U.S. economic releases and corporate earnings for confirmation of this bullish sentiment.