The Nasdaq experienced a pullback following the more hawkish stance from Fed Chair Powell and a softer than expected Non-Farm Payrolls (NFP) report. The NFP report affected risk sentiment, with growth expectations impacted. However, Fed\u2019s Williams indicated an open mind going into September’s meeting. Markets have adjusted, now pricing 58 basis points of easing by year-end, up from the previous 35 basis points. Lower inflation figures from ISM Manufacturing and UMich reports may support the stock market.<\/p>\n
Upcoming catalysts include the ISM Services PMI and Jobless Claims data. A combination of lower inflation and favourable jobless claims could boost the Nasdaq. This may lead to anticipation of Fed Chair Powell considering a rate cut in September at the Jackson Hole Symposium.<\/p>\n
Technically, on the daily chart, Nasdaq extended its pullback but may find support around the 22,400 level. Buyers may step in here for another leg higher, while sellers target the 21,000 level. On the 4-hour chart, dip-buyers supported the trendline at 22,800. For a bullish setup, buyers aim for new highs. The 1-hour chart shows a potential double bottom, with minor support at 23,000. This level may see buyers engage to continue the upward trend.<\/p>\n
The market is still reacting to last week’s softer-than-expected jobs report from Friday, August 1st, 2025. The Non-Farm Payrolls number for July came in at just 155,000, falling short of the 190,000 consensus estimate. This miss, combined with a slightly firm tone from the Fed Chair last month, triggered the initial pullback we saw in the Nasdaq.<\/p>\n
As a result, we are now pricing in about 58 basis points of rate cuts from the Federal Reserve by the end of this year, a big jump from the 35 basis points expected before the jobs report. This view is supported by the latest PCE inflation data for June 2025, which held steady at a manageable 2.6%. The path for the Fed to begin easing policy seems to be clearing.<\/p>\n
All eyes are now on this week’s data to confirm this dovish shift. We are focused on the ISM Services PMI report tomorrow, paying close attention to its Prices Paid component which we saw fall to 49.5 in the recent manufacturing report. A similar reading, showing cooling price pressures, would be very supportive for stocks going forward.<\/p>\n
For derivative traders, this creates a clear opportunity to position for a potential move toward new highs in the Nasdaq. Buying calls or long futures on any dip towards the 23,000 level looks like a strong risk-to-reward setup. We saw buyers step in aggressively at the 22,800 trendline last week, showing there is a strong appetite to buy on weakness.<\/p>\n
On the other hand, a break below that key trendline around 22,800 would signal that the bullish setup is failing. A surprisingly high inflation number from tomorrow’s ISM report could be the catalyst for such a breakdown. In that scenario, traders would look to buy puts or short the market, targeting the larger support zone down at 22,400.<\/p>\n
We can look back at the market action in late 2023 for a historical parallel when the market became convinced the Fed’s hiking cycle was over. After that pivot in expectations, the Nasdaq began a powerful multi-month rally into 2024. We could be at the very beginning of a similar move now if the upcoming data cooperates.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Nasdaq pulls back after Fed signals hawkish tone; support seen near 22,400 as rate cut hopes rise.<\/p>\n","protected":false},"author":62,"featured_media":16985,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-28130","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/28130","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=28130"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/28130\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16985"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=28130"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=28130"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=28130"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}