The Nasdaq opened the week with mixed signals, slipping 0.3% on Monday despite futures briefly flirting with record highs. Investors brace for a pivotal week as US consumer price data—expected to show core inflation rising to 3.0%, well above the Federal Reserve’s 2% target—could dictate the tech-heavy index’s trajectory. While strong earnings (73% of companies beat profit forecasts) buoy sentiment, trade tensions and stagflation fears lurk beneath the surface. A reported deal requiring chip giants to forfeit 15% of China-related revenue for export licenses adds uncertainty, though markets still price in a 90% chance of September rate cuts.
Fed Policy Crossroads
Tuesday’s inflation print presents a double-edged sword: Higher numbers may delay anticipated monetary easing, while lower figures could fuel recession concerns. The Nasdaq’s recent rally—now just 0.2% off record highs—faces a stress test as conflicting forces collide. With the Fed chair’s term ending soon and trade truces offering temporary relief, tech stocks navigate a precarious balance between growth optimism and macroeconomic headwinds. The next 48 hours may determine whether the sector sustains momentum or stumbles.
