Live Comments

NASDAQ is rallying on more than just optimism—it’s being powered by fundamentals. The index surged to a fresh record high this week as markets increasingly price in a resolution to Middle East tensions that would bring oil price back to pre-war levels, while at the same time embracing a renewed wave of confidence in the AI trade. This is not just a risk rally—it’s a structural shift back into tech leadership.

At the heart of the move is a decisive turn in AI sentiment. Strong earnings from TSMC and ASML delivered what markets had been waiting for: proof that the AI cycle remains intact. While both stocks saw “sell-the-news” reactions, the broader message was clear—AI demand is real and durable. More importantly, leadership has broadened beyond the traditional “picks and shovels” into the “miners,” with Nvidia, Microsoft, Meta, and Alphabet driving gains as AI monetization begins to show up in earnings.

This expansion in leadership is a key bullish signal. The fact that NASDAQ is hitting new highs even as TSMC and ASML consolidate suggests the rally is no longer narrow. The AI trade has evolved from infrastructure buildout to revenue generation, and markets are now pricing that transition aggressively. What was doubted earlier this year is now being confirmed—and repriced.

Macro dynamics are reinforcing this shift. Optimism around a potential US-Iran deal is driving expectations that oil prices will normalize back below $80 at a later stage. That assumption is critical, as it underpins the view that the current energy-driven inflation spike will prove temporary rather than structural.

In a counterintuitive twist, the geopolitical shock has actually strengthened the dovish Fed narrative. Higher energy prices and supply disruptions have weighed on consumer activity and labor momentum. If oil does normalize, the Fed would have clearer scope to resume its rate-cut cycle later this year.

Taken together, markets are pricing both the end of the oil shock and the return of AI dominance. This dual tailwind—macro relief and micro confirmation—is what sets the current rally apart from earlier moves that relied more heavily on sentiment alone.

Technically, while some volatility could be seen, near term outlook will stay bullish in NASDAQ as long as 55 D EMA (now at 22,633) holds. Next medium term target is 61.8% projection of 14,784 to 24,020 from 20,690 at 26,398.

New York Fed President John Williams warned that rising energy prices are already feeding into inflation, as the Iran War pushed up costs across the economy. He noted that “developments in the Middle East are driving significant increases in energy prices,” with effects now visible not only in fuel but also in airfares, groceries, and other consumer goods.

Williams emphasized that the shock carries two-sided risks. While energy prices could ease if supply disruptions are resolved, he cautioned that the conflict could evolve into a broader supply shock that “simultaneously raises inflation… and dampens economic activity.” This dynamic, he said, “has begun to play out already,” highlighting early signs of stagflationary pressure.

Despite these risks, Williams struck a measured tone on policy. He said monetary policy is “well positioned to balance the risks” to both inflation and employment, without signaling any immediate shift in direction. While acknowledging that the outlook is “highly uncertain,” he maintained expectations for solid growth of 2%–2.5% this year, with inflation around 2.75%–3% before gradually returning to target by 2027, supported by stable longer-term inflation expectations.

US initial jobless claims fell by -11k to 207k in the week ending April 10, coming in below expectations of 215k and signaling continued strength in the labor market. The 4-week moving average edged up slightly to 209,750, but remains consistent with a low level of layoffs overall.

However, continuing claims told a more nuanced story. The number of people receiving ongoing unemployment benefits rose by 31k to 1.818 million, suggesting it is taking slightly longer for displaced workers to find new jobs. Despite the weekly increase, the 4-week average declined to 1.813 million, the lowest level since early June 2024, pointing to broadly stable underlying conditions.

Taken together, low initial claims indicate limited layoffs, while the rise in continuing claims hints at some softening in re-employment dynamics.

Full US jobless claims release here.