NAS100 - Where will the stock market ?!The index is above the EMA200 and EMA50 on the four-hour timeframe and has re-entered its ascending channel. If this channel is maintained, its upward path to the specified price target will be possible, but before that, the downward trend line must be broken in a valid way. If the channel is lost, the index's downward path will continue to around 23,000 points.
Federal Reserve Chair Jerome Powell’s latest remarks, delivered in a dovish tone, boosted bullish sentiment in financial markets and sparked a new wave of optimism among Wall Street investors and market participants. Following Powell’s speech, U.S. stock benchmarks surged sharply, with capital flows notably directed into the Russell 2000 index of small-cap companies, which jumped 3.86%—its strongest gain since April 9.
During his keynote at the Federal Reserve’s annual symposium, Powell implicitly suggested that an interest rate cut could come as soon as next month. At the same time, he warned of rising inflation risks and signs of slower economic growth, stressing that although risks are relatively balanced, the current environment may require an adjustment in monetary policy. He stated: “Given that monetary policy remains in a restrictive stance, the baseline outlook and the shifting balance of risks may warrant a reassessment of our policy stance.”
Naeem Aslam, chief investment strategist at Zaye Capital Markets, described Powell’s comments as a turning point for markets, saying: “Powell’s dovish tone came as a real surprise to many market participants who did not expect such an approach from the Fed Chair. His remarks were clearly interpreted as a dovish signal.”
Following Powell’s comments, traders raised their expectations for a September rate cut. Barclays revised its forecast and now expects the Federal Reserve to deliver two 25-basis-point cuts this year—in September and December.
Meanwhile, Fitch Ratings affirmed the U.S. sovereign credit rating at AA+ with a stable outlook, a decision made despite significant political uncertainty. According to Fitch, rising trade tariffs, government spending cuts, stricter border controls, and increased deportations have heightened policy uncertainty, weighing on household consumption and business investment.
Fitch projects that the U.S. economy will remain in recession in 2026, growing only 1.5%, as elevated inflation and policy uncertainty continue to dampen consumer spending. However, the agency expects that faster rate cuts that year could boost domestic demand, helping growth rebound to 2.1% in 2027.
This week, two key reports are in focus: the second estimate of Q2 GDP and July’s Personal Consumption Expenditures (PCE) Price Index. The initial GDP estimate showed a 3% expansion, and consensus forecasts anticipate confirmation of this figure. In contrast, the Atlanta Fed’s GDPNow model projects a 2.3% growth rate, which, while lower, still points to economic resilience and suggests no urgent need for accelerated rate cuts—even as political pressure from the White House on Powell continues. Notably, GDPNow will be revised on Tuesday ahead of the official release.
Inflation data, however, carry greater weight. The core PCE index, the Fed’s preferred inflation gauge, has closely tracked core CPI for the past decade. With July’s core CPI climbing from 2.9% to 3.1%, there is a risk that PCE will follow the same path. Such a scenario would signal persistent inflationary pressures and significantly reduce the likelihood of a second rate cut this year.
If these data confirm stronger inflation, the U.S. dollar will likely strengthen further, while equities could come under additional pressure. A slower pace of monetary easing diminishes the present value of future cash flows for growth-oriented companies, explaining why Wall Street’s corrective phase may persist.
On the corporate front, Nvidia’s CEO said that the ability to ship its H20 chip to China is highly valuable and poses no national security concerns. He added that the decision to supply a next-generation AI data center chip to China, which will succeed the H20, is not within Nvidia’s direct control. The company is set to report earnings on Wednesday and remains in discussions with the U.S. government, though no resolution has yet been reached. The CEO also mentioned that his brief visit to Taiwan would mainly involve a dinner with TSMC executives. He revealed TSMC’s new “Rubin” architecture, comprising six new chips, and announced that Nvidia will hold its GTC conference in Washington, D.C. for the first time.
Separately, Meta has halted AI hiring after onboarding more than 50 specialists with lucrative compensation packages. The freeze affects both new hires and internal transfers, unless personally approved by Alexander Wang, head of AI. In recent months, Meta has reorganized its AI division into four separate teams to advance its “superintelligence” projects. Analysts have warned about rising costs and equity grants, framing the hiring pause as part of broader budget control and organizational restructuring efforts.
