Wall Street experienced one of its most turbulent 48-hour stretches of the year, driven by a hawkish Federal Reserve dissent, escalating Middle East tensions, and a subsequent rebound fueled by strong corporate earnings.

On Wednesday, the Federal Reserve maintained its benchmark interest rate at 3.50%-3.75%. However, three FOMC members broke ranks to call for a rate hike—an unusually hawkish dissent that triggered a Dow Jones decline of more than 1,100 points, marking its worst single session since April 2025. Treasury yields surged, with the 30-year bond reaching levels not seen since 2007, as renewed US-Iran military strikes pushed oil prices higher and rekindled inflation concerns. Rising long-end yields pose a particular challenge for rate-sensitive growth and technology equities, where valuations depend heavily on future cash flows discounted at prevailing rates. The Nasdaq 100 briefly entered correction territory, falling 11% from its June record high.

Thursday brought a sharp reversal. Microsoft delivered blockbuster earnings, highlighted by a surge in its Azure cloud business, which, combined with a rebound in battered semiconductor stocks, propelled the Nasdaq Composite (US Tech Mini on FXOpen) to a 2.8% gain and ended a six-day losing streak. Because the Nasdaq 100 is heavily concentrated in a handful of mega-cap technology firms, strong results from a single constituent can disproportionately influence index-level direction. The semiconductor recovery also carried broader significance, as the sector has been under pressure not only from geopolitical risk but from ongoing US-China export control tensions that have cast uncertainty over chip demand trajectories.

The volatility underscores three competing forces shaping market direction: Federal Reserve Chair Kevin Warsh's determination to reinforce his inflation-fighting stance, a Middle East conflict that continues to intensify, and a technology sector whose AI-driven earnings growth may be strong enough to offset both headwinds. The episode also illustrates a broader pattern seen throughout the current cycle, where index-level swings are increasingly driven by the earnings performance of a narrow group of large-cap technology names rather than broad-based economic data alone.

Nasdaq 100 Technical Analysis

On the chart, the Nasdaq 100 (US Tech 100 Mini on FXOpen) is testing a descending trendline that has defined its downward trajectory from late June highs. Price is also pressing against the 100-period EMA near 28,620, a confluence that has repeatedly capped rallies over recent sessions. The RSI is exhibiting a bullish divergence, forming higher lows even as price established a new low in late July.

Bullish Scenario: A decisive breakout above both the descending trendline and the 100-period EMA would lend technical validity to the divergence, potentially opening a path toward the 28,800-29,000 resistance zone and, further out, a retest of the June highs near 30,750.

Bearish Scenario: A rejection at the trendline-EMA confluence would invalidate the bullish divergence in the near term, sending price back toward the 27,720 area, corresponding to the 0.382 Fibonacci retracement of the March-June rally. A deeper decline would expose the 0.5 and 0.618 retracements near 26,789 and 25,850, respectively—levels that previously served as key support during the spring advance.

With price positioned directly beneath an unconquered trendline and the RSI signaling potential underlying strength, the Nasdaq 100 (US Tech 100 Mini on FXOpen) faces the central question of the week: whether the recent correction was temporary noise or the beginning of a more sustained move.