Nasdaq 100 Edges Higher as Investors Eye Insider Trades

Nasdaq 100 index closes 0.2% higher, extending gains from previous session amid optimism over potential interest rate cuts. The index is on track to gain 1.2% for the week, driven by weaker jobless claims and strong corporate earnings.

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Nasdaq 100 Edges Higher as Investors Eye Insider Trades

Nasdaq 100 Edges Higher as Investors Eye Insider Trades

The Nasdaq 100 index closed 0.2% higher on Thursday, May 10, 2024, extending gains from the previous session as investors monitored notable insider trades and remained optimistic about potential interest rate cuts by the Federal Reserve. The tech-heavy index is on track to gain 1.2% for the week.

Why this matters: The direction of the Nasdaq 100 has significant implications for the overall health of the US economy, as it is closely tied to the performance of major technology companies. A continued upward trend could boost consumer confidence and drive further economic growth.

Weaker-than-expected jobless claims and softer non-farm payroll data have boosted hopes that the Fed could cut interest rates as early as September. The market is currently pricing in a 50% probability of a 25 basis point rate cut in September, according to the CME Fed Watch tool. Attention will now turn to the upcoming US inflation data next week for further clues on the timing and scale of any potential rate adjustments.

The upbeat earnings season has also helped lift market sentiment, with S&P 500 companies that have reported so far on track to raise earnings by 7.8%, ahead of expectations of 5.1% growth. Strong corporate earnings from companies like Nvidia, Tesla, and Novavax, which are set to open higher after reporting positive results, have further buoyed investor confidence.

Deutsche Bank analyst Henry Allen noted,"The next hurdle will be the US inflation numbers for April next week, but so far this month at least, investors have moved to expect a more dovish stance of monetary policy than they thought would happen at the end of April. "Several Fed speakers, including Fed presidents Lorie Logan, Neel Kashkari, and Austin Goolsbee, are due to speak today, which could provide additional insights into the central bank's stance on monetary policy.

From a technical perspective, the Nasdaq 100 has extended its gains, supported by the RSI above 50 and pushing above the 17,800 and 18,000 levels. Bulls are now eyeing the all-time high of 18,466, while support can be seen at 17,800 and the May low of 17,284. Market analyst Christopher Lewis identifies two key levels to monitor: 17,850, which serves as a short-term floor, and 17,000, which offers a more substantial support level.

In other market developments, oil prices are set for a weekly rise, driven by an improved demand outlook and stronger-than-expected import data from China. The US dollar is holding steady but is set to rise across the week after two weeks of losses. EUR/USD is holding steady amid a relatively quiet day for data, while GBP/USD is rising after UK GDP data came in stronger than expected.

As the Nasdaq 100 continues its upward trajectory, investors will closely monitor upcoming economic data, Fed speeches, and corporate earnings reports to gauge the index's future direction. With the market anticipating potential interest rate cuts and strong corporate performance, the Nasdaq 100 appears well-positioned to test its all-time highs in the near future.