Tech Stocks Surge as AI Optimism Returns

A powerful wave of buying is sweeping through technology shares, reignited by stellar results from a key industry leader. While the Federal Reserve maintains its cautious stance on interest rates, investor sentiment is being overwhelmingly driven by exceptional corporate performance in the artificial intelligence sector. The critical question for traders is whether this positive momentum can override persistent macroeconomic headwinds.

The catalyst for the rally came from semiconductor leader Nvidia, which delivered a quarterly report that far surpassed expectations. Following Wednesday's market close, the company not only announced impressive financial figures but also issued a significantly upgraded profit outlook, sending a strong message to skeptics of the AI revolution. In pre-market trading, Nvidia shares advanced approximately 4%, pulling the broader sector upward with them.

This market response indicates that fears of a premature end to the AI boom may have been overstated. The positive sentiment is spreading across the industry, benefiting chipmakers from AMD and Micron to Broadcom. Even data analytics firms like Palantir are participating in the upward move.

Technical Momentum Builds for Nasdaq 100

The current surge appears poised to provide crucial technical momentum. Futures for the NASDAQ 100 index are climbing 1.4%, already pushing through the 50-day moving average. Market attention now focuses on the significant resistance level at 25,284 points, which represents the upper boundary of the recent consolidation pattern.

Should investors sell immediately? Or is it worth buying NASDAQ 100?

A sustained breakthrough above this level would confirm the bullish sentiment and potentially trigger fresh buying signals from institutional investors. Technical indicators suggest there's additional room for advancement, with the RSI reading of 55 indicating the index isn't yet in overbought territory.

Underlying Economic Concerns Persist

Despite the celebratory mood, several risk factors linger in the background. While Nvidia's performance impresses, the U.S. dollar has strengthened to a monthly high above 100 points—traditionally a challenge for technology companies with substantial international sales. Additionally, market participants are awaiting delayed U.S. employment data scheduled for release this afternoon, which could introduce significant volatility.

The Federal Reserve contributes to the uncertainty through its divided stance. Recent meeting minutes reveal a deeply split central bank that continues to struggle with the timing of potential rate reductions. Market-implied probability for a December cut remains modest at just 33%.

Whether the Nvidia-fueled rally can maintain its strength will likely become clearer today, with the outcome potentially setting the tone for both the technology sector and overall market sentiment for weeks to come.