Nasdaq Forecast: Struggles to Hold onto Gains – 14 August 2025

-- The NASDAQ 100 initially rallied during the trading session on Wednesday but struggled to hang on to the gains.
-- This shows a market to me that is a little overdone, and a pullback does make a certain amount of sense.
-- This isn’t to say that I would be looking to short the NASDAQ 100 anytime soon, but it would not surprise me at all to see a little bit of sideways action in this environment, as we have seen such a sharp rally in what would have been a relatively low volume world.

PPI on Thursday

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While I don’t think that PPI is going to be a massive long-term influence on the markets, it is worth paying attention to the idea of inflation in the United States, because it can give traders an idea as to how monetary policy might evolve. Ultimately, the NASDAQ loves low interest rates and there is an expectation that the Federal Reserve will start cutting interest rates in September, perhaps even cutting a couple more times between now and the end of the year. Whether or not that’s true remains to be seen, because quite frankly, the Federal Reserve has been very reluctant to do so.

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Keep an eye on the “magnificent 7” as per usual, because it’s the same 7 stocks that drive the NASDAQ 100. Think Nvidia, Tesla, Apple, Meta, Google, Amazon, and Microsoft. If these companies continue to attract inflows, that will be the main driver of the NASDAQ 100 rallying. However, the weakness in the NASDAQ 100 for me on Wednesday wasn’t a huge problem, mainly due to the fact that the Russell 2000 did so well. What this tells me is that we might be in the midst of rotation, and people are starting to spread out from the artificial intelligence trade. That’s actually an extraordinarily bullish sign for all indices, not just this one. In other words, I think we pull back from here, it will end up being a buying opportunity.

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