Published: 10 December 2025,06:49
Daily Market Analysis New
*Tech and growth sectors supported by Fed optimism: Nasdaq and other growth-oriented equities have benefitted from expectations that the Fed is near the end of its tightening cycle, which lowers discount rates on future earnings.
*Earnings headwinds create fragility: Rising costs and cautious profit guidance from major banks, such as JPMorgan, have pressured large-cap and Dow components, highlighting that not all sectors are aligned.
U.S. equities have remained resilient in recent weeks, supported by optimism that the Federal Reserve is nearing the end of its tightening cycle. Growth-oriented sectors, particularly tech and Nasdaq-listed stocks, have benefited from lower discount rates on future earnings, helping highly valued, long-duration companies withstand broader market volatility. Despite recent swings, the Nasdaq Composite has held up relatively well, reflecting investor optimism that dovish Fed guidance or softer-than-expected yields could sustain the rally.
However, the upside remains fragile. Earnings guidance from major financial institutions, including JPMorgan Chase & Co., has highlighted rising costs and narrower profit margins, weighing on large-cap and Dow Jones Industrial Average components. Rising Treasury yields or signals of caution from the Fed could disproportionately impact rate-sensitive sectors, particularly tech and growth stocks. Meanwhile, concerns over equity valuations are growing. A Bank for International Settlements (BIS) report flagged the simultaneous surge in equities and gold, along with strong retail-driven flows, as a potential sign of overheating or bubble risk.
Political, fiscal, and geopolitical factors continue to add uncertainty. Recent U.S. overseas interventions, trade and tariff rhetoric, and discussions about Treasury swap lines or credit facilities for allies have introduced an additional risk premium for equities. Sectors tied to industrial production, exports, or global supply chains are particularly vulnerable. Moreover, rate cuts by the Fed could compress bank net interest margins, pressuring financial-sector profitability, even as dovish sentiment broadly lifts risk assets.
Overall, Wall Street faces a delicate balancing act. While cyclical, value-oriented, and large-cap equities may enjoy intermittent strength, downside risks are ever-present: shifting investor sentiment, disappointing macro data, or unexpected Fed guidance could trigger rapid sell-offs, especially in overextended tech names. Traders and investors are keeping a close eye on the FOMC, U.S. labour data, and Treasury yields as immediate catalysts for equity market direction.
Technical Analysis
The Nasdaq chart continues to show a strong upward structure, maintaining its bullish trend after rebounding from the mid-Fibonacci zones. Price is hovering just below the major resistance area near the previous high at 25,695, forming a mild consolidation range.
Although upward momentum remains intact, the RSI shows early signs of bearish divergence, suggesting buying pressure may be slowing, while MACD remains positive but with momentum flattening. This combination typically indicates that the market may be approaching a short-term exhaustion point. A decisive breakout above the current resistance could trigger a continuation toward fresh highs, but rejection here could lead to a healthy pullback toward the 23,900 Fibonacci support region. Overall, Nasdaq maintains a bullish bias but appears stretched, with potential for a short-term correction before any further rally.
Resistance level: 25,695.00, 27,970.00
Support level: 23,900.00, 22,500.00
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