Nasdaq 100: Nvidia Buzz vs. Bond Market Blues
Nasdaq 100: Nvidia Buzz vs. Bond Market Blues
- * Nasdaq 100 buoyed by Nvidia’s blowout results and easing trade fears
- * Rising bond yields and debt worries could cap further gains
- * Traders eye US data, Japan and Germany inflation for the next cue
The Nasdaq 100 futures leapt higher overnight, fuelled by Nvidia’s stellar earnings report and a US court decision that ruled most of Trump’s China tariffs unlawful. On the surface, that’s a solidly bullish mix—less trade friction and a tech titan exceeding expectations. But there’s a shadow looming in the form of bond yields, which are inching back above the psychologically sensitive 5% mark on the 30-year US Treasury. Japan’s 30-year yield is also nudging the 3% threshold, and if that trend persists, it could prompt a shift to risk-off positioning. Already, USD/JPY fell over 100 pips from its overnight peak, and indices like the FTSE turned negative on the day. That said, US futures remained broadly in positive territory at the time of writing.
Nvidia’s Glow Lifts the Nasdaq 100—for Now
The performance of Nvidia stock continues to be a major driver of sentiment. The shares surged 6.5% in after-hours trading following an upbeat revenue forecast, brushing aside concerns about softer Chinese demand. The company’s plans to scale up production of its new Blackwell chips added another layer of optimism for the AI camp. That enthusiasm carried the broader Nasdaq 100 higher, and other major index futures followed suit—highlighting just how influential Big Tech has become in steering market mood.
It wasn’t just tech exuberance doing the heavy lifting. The tariff ruling also offered markets a glimmer of relief. A reduction in trade tensions could, in theory, support global growth—and by extension, corporate earnings.
Rising Yields Threaten to Undermine the Tech Rally
Here’s where the bullish momentum we have seen in the Nasdaq 100 futures could run into resistance. As tech stocks rally, the bond market is painting a more cautious picture. The US 30-year yield creeping back above 5% has historically been a cue for broader risk aversion. That’s perhaps why gold has bounced sharply from its $3250 support. Moody’s recent downgrade of the US’s final top-tier credit rating only adds to the concern. Investors are growing increasingly wary of escalating debt levels and excessive government spending, and are hedging their bets—selling off Treasuries and the dollar, while turning to gold and foreign currencies.
Japan’s Quiet Storm
And then there’s Japan. The country’s ultra-long government bonds are under fresh pressure. They had found some support after news emerged that the Ministry of Finance plans to shift issuance towards shorter maturities. That short-lived reprieve has faded, with longer-dated Japanese bonds now seeing some of the weakest demand in years.
The Bank of Japan—still the largest single holder of JGBs—has been gradually trimming its balance sheet, reducing holdings by some ¥21 trillion since late 2023. But without the BOJ propping up demand, the latest auctions for 20- and 40-year bonds have been underwhelming, driving yields higher.
What happens in Japan no longer stays in Japan. The BOJ faces a tightrope walk: manage inflation without destabilising markets. As it weighs a review of its bond-buying programme in June, the outcome could reverberate globally. Higher Japanese yields could draw capital away from the US, threatening to unwind carry trades.
Nasdaq 100 technical analysis
While the broader macroeconomic anxieties remain very much in play, they’ve yet to manifest meaningfully in equity prices—at least not just yet. In fact, the recent breakout above the 21,500 mark on the Nasdaq 100 chart offers further encouragement to the bulls. The real question now is whether this level holds firm, or if we see price action slip back beneath it. Should the latter occur, the bullish camp could well find themselves under a bit of pressure. In such a case, a measured pullback wouldn’t come as a surprise. The next notable support resides around 21,170, with the more significant support of 20,200 – 20,300 area coming in below recent low at 20,665.
To the upside, resistance levels are increasingly sparse, owing to the strength of the latest rally. At the time of writing, the Nasdaq 100 was testing the lower end of a resistance range between 21,770 to 21,900. The breakdown from this area back in February triggered a sharp sell-off. The next psychological milestone sits at 22,000, with the former record high at 22,225 thereafter.
Meanwhile, momentum indicators are beginning to flash caution. The RSI is nudging up towards the overbought threshold of 70 once more, which might well tempt a bit of profit-taking at these elevated levels.
Trader | Analyst | TradingCandles.com
e: Fawad.Razaqzada@TradingCandles.com
20250529
