Nasdaq 100 Forecast: Tesla Gains, Nvidia’s AI Chips Face Scrutiny

Nasdaq Gains as Tesla Leads Tech; Broader Markets Mixed

Stocks opened the week with a mixed performance as investors await key earnings reports and monitor market developments. The Nasdaq Composite edged up 0.2%, led by a 7% surge in Tesla shares. Meanwhile, the Dow Jones Industrial Average slipped 30 points, and the S&P 500 hovered near flat.

Tech Gains Offset Broader Market Weakness

Tesla’s rally followed a Bloomberg report suggesting President-elect Donald Trump’s administration plans to prioritize easing regulations on self-driving vehicles. This boosted optimism in the EV sector, lifting the Nasdaq even as concerns about Federal Reserve interest rate policy weighed on broader markets.

Nvidia’s stock dropped nearly 3% after reports surfaced of overheating issues with its Blackwell AI chips, raising doubts about potential delays. The company’s earnings, set for release Wednesday, are expected to provide further clarity. Other notable tech movers included Roku, which gained 3.1% following an upgrade by Baird, citing long-term growth potential despite a challenging year.

Sector Performance Highlights

Consumer discretionary stocks outperformed, rising 1.29%, driven by strength in Tesla and gains in retail stocks ahead of earnings reports from Walmart, Target, and Ross. Energy gained 0.36%, supported by a 5% rise in Liberty Energy following the selection of CEO Chris Wright as energy secretary.

Health care lagged, slipping 0.27%, as CVS Health added 2% after Wells Fargo upgraded the stock on expectations of stabilized growth in its Aetna segment. Moderna gained 2.4% on optimism surrounding its pivot to oncology treatments, though broader sector sentiment remained cautious.

Individual Stock Standouts

Super Micro Computer jumped 13% after reports indicated it would avoid delisting from the Nasdaq by filing its delayed annual report. Spirit Airlines saw a 2.8% rise after resuming trading post-bankruptcy filing, while Warner Bros. Discovery advanced 3% on a favorable settlement with the NBA.

Robinhood rose 1% on hopes of regulatory relaxation under new SEC leadership. Oklo surged 9%, benefiting from Liberty Energy CEO Chris Wright’s connection to the nuclear startup.

Interest Rate Concerns Loom Over Markets

Fed Chair Jerome Powell’s remarks last week that the central bank is not in a hurry to cut rates dampened investor sentiment. With strong economic data and a robust labor market, traders are pricing in year-end rates between 4.25% and 4.50%, according to the CME FedWatch Tool.

Market Outlook

This week’s earnings reports, particularly from Nvidia and major retailers, will likely set the tone for markets. While tech continues to show resilience, broader sentiment remains cautious amid rate concerns.

A positive earnings surprise from Nvidia could reignite bullish momentum for the sector, though overheating issues may temper near-term gains. Broad-based markets may remain range-bound as traders weigh corporate guidance against economic headwinds.