Nasdaq 100 Forecast: Nvidia, Salesforce Boost Tech Stocks as Wall Street Rebounds

Stock Futures Rebound as Wall Street Recovers from Previous Decline

Stock futures rose on Thursday, signaling a potential recovery from the prior session’s losses. On Wednesday, major indices fell sharply, with the Nasdaq Composite down 1.12%, the S&P 500 dropping 0.6%, and the Dow Jones Industrial Average slipping 159 points, or 0.39%. Investors are now turning their focus to key earnings reports and upcoming economic data, aiming to gauge market direction.

Nvidia’s Strong Earnings Amid Modest Stock Decline

Nvidia shares initially dropped as much as 8% in after-hours trading following the release of its fiscal second-quarter results but have since recovered much of that decline, now down only 1.8%. The AI chipmaker posted strong earnings, with adjusted earnings per share of $0.68, surpassing the LSEG consensus of $0.64, and revenue of $30.04 billion, exceeding expectations of $28.7 billion. Nvidia also offered an optimistic revenue forecast of $32.5 billion for the current quarter, above the $31.77 billion anticipated by analysts.

Despite these solid results, the stock’s initial decline reflects concerns about whether Nvidia’s growth can sustain its high valuation. However, analysts like Adam Crisafulli of Vital Knowledge suggest that the sell-off is an overreaction, given the company’s robust performance and guidance. Nvidia remains crucial to market sentiment, especially as it now represents about 7% of the S&P 500.

Salesforce and CrowdStrike Outperform as Earnings Drive Gains

While Nvidia experienced some volatility, other tech companies posted strong gains. Salesforce shares jumped 5% after the software giant reported better-than-expected fiscal second-quarter results and raised its full-year profit outlook. Similarly, CrowdStrike saw its shares rise by 3.9% following earnings that exceeded expectations, with adjusted earnings of $1.04 per share beating the consensus estimate of $0.97.

These positive earnings reports helped offset some of the broader market’s recent losses, showcasing the resilience of key tech stocks amid a mixed earnings season.

Key Economic Data and Fed’s Next Steps in Focus

Thursday also brings significant economic data that could influence market direction. Investors are closely watching the U.S. initial jobless claims and second-quarter gross domestic product (GDP) data, both due at 12:30 GMT. Later in the day, pending home sales figures for July will be released, providing further insights into the housing market’s health.

Additionally, the market is awaiting the U.S. personal consumption expenditures (PCE) price index on Friday, the Federal Reserve’s preferred inflation gauge. This data could offer crucial signals about the Fed’s future rate policy, especially as market participants increasingly expect a rate cut at the central bank’s September meeting. The CME Group’s FedWatch Tool shows a 65.5% chance of a 25-basis-point rate cut, with a 34.5% chance of a 50-basis-point cut.

Market Forecast: Cautious Optimism with Focus on Data and Fed

Looking ahead, the market may experience cautious optimism as traders digest strong earnings while awaiting key economic data. Nvidia’s performance will remain a focal point, while the Fed’s next moves, influenced by upcoming data, could be pivotal in shaping the market’s direction. Investors should stay alert for any surprises in economic reports or Fed communications that could introduce volatility.

Technical Analysis

E-mini Nasdaq-100 Index futures are edging higher on Thursday, recovering from overnight weakness. The daily chart shows buyers came in following a test of the pivot at $19167.50. If this level fails then we could see a steep drop with the 200-day moving average at 18491.91 the next major target.

Holding above the pivot will signal the presence of buyers. If this creates enough upside momentum then look for a near-term test of the 50-day moving average at 19639.27.