Nasdaq eases after surging to record highs as rising oil weighs on sentiment
Nasdaq eases after surging to record highs as rising oil weighs on sentiment
US index futures fell overnight after Wall Street had managed to hold their nerve yesterday, despite soft signals from Europe and elsewhere. Strong earnings out of the US helped equities stay relatively steady, even as tensions in the Gulf showed signs of flaring up again. There was also a bit shift in FX markets with investors moving away from low-yielding and energy-importing currencies and back towards the dollar. That motion has continued today, and we are seeing further struggles for global indices and futures. Tesla failed to hold gains despite shares rising initially after reporting stronger results.
Oil prices continue to rise, posing risk to global markets
Yesterday, there was some optimism that Iran had received “some indication” the US might consider easing the blockade. However, so far there has been such official indications and the upward pressure on oil prices has quickly resumed, with Brent climbing well above the $100 level. For now, markets remain highly sensitive to headlines. Developments between the US and Iran are likely to drive direction until there is clearer resolution. At present, the path of least resistance still appears upward for oil prices, with traders watching closely for any escalation that could trigger the next move.
With the US extending the ceasefire deadline indefinitely, there is some optimism around a potential resolution. Still, any meaningful re-escalation could push prices sharply higher. Another factor to consider is the ongoing closure of the Strait of Hormuz, which continues to deepen the supply shortfall.
The global economy remains heavily dependent on energy flows from the Gulf, and replacing that supply is neither quick nor straightforward. The longer the strait stays closed, the greater the imbalance in the market. While some importing countries may attempt fuel rationing to curb demand, this is unlikely to be sufficient. A demand collapse on the scale seen during COVID lockdowns also appears highly improbable.
As a result, a sustained decline in prices would likely require more than political pressure or demand-reduction efforts—it would depend on a genuine resumption of oil shipments through the Strait of Hormuz.
The longer the strait remains shut the worse it is for risk appetite and the global economy.
Nasdaq 100 technical analysis
From a technical point of view, the US market is still looking quite strong, particularly the Nasdaq 100 futures. For that reason, buying remains the preferred trading strategy. However, it’s important to see whether the breakout to new all-time highs can hold.
The key support zone to watch lies between 26,350 and 26,400. This area marks the previous all-time highs, from January 2026 and October 2025. Since this zone has now been broken to the upside, it needs to hold as support to maintain the bullish bias.
If the index falls below this area, it could invite downside pressure. In that case, we may see a move toward 26,000, which is another support level, or even lower toward 25,500. Beyond that, levels like 25,000 could come into focus. Overall, the 26,350–26,400 region will be critical.
Before reaching those levels, there is also a shorter-term support to watch around 26,850, which serves as interim support.
On the upside, there is limited resistance since the index is trading at or near record highs. Still, it’s worth monitoring Fibonacci extension levels. Based on a move drawn from the January high to the late-March low, the 127.2% extension comes in around 27,270, while the 161.8% extension is near 28,440.
Additionally, keep an eye on round numbers as potential areas for profit-taking, such as 27,500 and similar levels.
So how do you trade these markers right now?
The ongoing situation in the Middle East is continuing to cause markets to flip from being “risk on” one minute to “risk off” the next and then to risk on again etc. It is mostly because of Trump who keeps saying one thing and does another. Iran can’t trust him and wants the naval blockade to be removed before they sit down and talk. The longer this drags on, the higher oil will go, and the more damage the economic impact will be. Markets had been cautiously optimistic that the situation had resolved, which is why we saw a major rally in US equity markets in the previous couple of weeks, but that sentiment has now faded somewhat. In these conditions it is very difficult to trade: less is definitely more. Capital preservation is key. Also, when markets make you profit, don’t be shy to take it. Always try and reduce risk at first opportunity. This morning it was risk off again, but let’s see if Trump will come out and say something to cheer the markets again. Will the market listen to him is another question.
Trader | Analyst | TradingCandles.com
e: Fawad.Razaqzada@TradingCandles.com
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