NAS100 - Stock market awaits an important week!The index is above the EMA200 and EMA50 on the 4-hour timeframe and is trading in the specified pattern. If it does not rise again above the broken trend line, I expect a correction.
If the index returns above the broken trend line, we can expect a new ATH to be recorded on the Nasdaq. It is better to wait for confirmation on the breakout in order to control further risk.
Last week, U.S. stock markets—particularly the Nasdaq index—experienced significant volatility, driven by a combination of economic and geopolitical factors:
• A reduction in trade tensions due to ongoing U.S.-China negotiations
• The release of inflation indicators
• Heightened geopolitical tensions
According to Politico, as G7 leaders meet in Canada, the escalating conflict between Israel and Iran will top the agenda. Politico reported that leaders of the free world have gathered in the Rocky Mountains to discuss the very real threat of a full-scale war in the Middle East. The initial sessions of the G7 summit will take place in Kananaskis, where the worsening Israel-Iran conflict will be the primary focus. Donald Trump, who in recent days has fueled tensions through social media, is now expected to join discussions aimed at de-escalation.
On the economic front, lower-than-expected inflation in May could encourage the Federal Reserve to cut interest rates sooner than markets had previously anticipated. On Wednesday, the Bureau of Labor Statistics reported that inflation rose 2.4% in May compared to a year earlier. Housing costs were identified as the primary driver of this inflation, while price increases in categories most affected by high tariffs were not as pronounced as economists had expected. So far this year, the Fed has refrained from cutting its benchmark interest rate, citing concerns that tariffs might push consumer prices higher. While the likelihood of a rate cut at this week’s meeting remains low, the latest report could ease some of these worries and accelerate the timeline for potential cuts.
Meanwhile, Bloomberg reported that a growing group of President Trump’s advisers is urging him to consider Besant for the Fed chair position. Jerome Powell’s current term extends until May 2026, and he was originally nominated by Trump in November 2017. Other names reportedly under consideration include Kevin Warsh (considered a favored candidate), Kevin Hassett (head of the White House National Economic Council), Christopher Waller (a current Fed board member), and David Malpass (former World Bank president).
After a week dominated by U.S. inflation data, investor attention in the coming days will shift toward central bank decisions and potential signals regarding the future path of interest rates. The trading week kicks off Monday with the Empire State Manufacturing Index, offering an initial snapshot of the industrial sector in New York. Later that day, the Bank of Japan will announce its first interest rate decision, an event that could shape Asian market trends and the yen’s valuation.
On Tuesday, May’s U.S. retail sales data will be released—a key indicator of consumer strength. Signs of weakness in this report could bolster expectations for rate cuts. Wednesday will be the focal point of the week, as the Federal Reserve announces its policy decision. While markets have already priced in a pause in tightening, investors will scrutinize Jerome Powell’s remarks for clues on the likelihood of rate cuts in the months ahead. Additionally, data on May housing starts and weekly jobless claims will also be released that day.
On Thursday, with U.S. markets closed for Juneteenth, attention will turn to monetary policy decisions from the Swiss National Bank and the Bank of England. Changes in tone or interest rates from these key European central banks could influence currency market volatility. Finally, the week will conclude Friday with the release of the Philadelphia Fed Manufacturing Index—a leading indicator closely watched by traders for insights into the health of the manufacturing sector in the U.S. East.
