Nasdaq Consolidates as Markets Await Key US CPI Report Ahead of Jackson Hole Symposium
Key Takeaways
- •The Nasdaq's rally stalled after the anticipated US-Iran deal failed to materialize, resulting in largely rangebound price action.
- •September rate hike probabilities whipsawed from 54% to 38% before settling at 50%, as the NFP report showed government job losses offset by an unemployment rate decline to 4.1%.
- •The US CPI report with Core CPI expected at 0.2% month-over-month will be critical for the September FOMC decision and Fed Chair Warsh's Jackson Hole speech.
- •The Nasdaq is consolidating below the key swing level at 30,065, with a symmetrical triangle on the 4-hour chart suggesting an impending directional breakout.
- •A busy week of economic data includes US PPI and Jobless Claims on Thursday, followed by Retail Sales and University of Michigan Consumer Sentiment on Friday.
Fundamental Overview
The Nasdaq's strong rally stalled last Wednesday after the anticipated US-Iran deal failed to materialize within the expected timeline. Since then, price action has been largely rangebound, with only a softer-than-expected Non-Farm Payrolls (NFP) report offering some support.
The NFP data triggered a dovish repricing of interest rate expectations, with the probability of a September rate hike dropping to 38%, down from 54% prior to the release. However, those probabilities subsequently rebounded to 50%.
This whipsaw in expectations stemmed from a significant loss of government jobs in the report, which made the overall figures appear softer than they actually were. The unemployment rate told a different story, falling further to 4.1%. Overall, the labor market remains on a healthier trajectory than it has been over the past three years.
Today brings the US CPI report, which will be critical for the September FOMC decision and Fed Chair Warsh's speech at the Jackson Hole Symposium. The annual gathering in Jackson Hole, Wyoming, has historically served as a platform where Fed chairs signal upcoming policy shifts, making it one of the most closely watched events on the monetary policy calendar. Market attention will center on the Core CPI month-over-month measure—which strips out volatile food and energy costs and is viewed by policymakers as a cleaner gauge of underlying inflation pressure—which is expected at 0.2%.
A hotter-than-expected report would likely trigger a short-term selloff as traders increase their rate hike bets. This sensitivity is particularly acute for the Nasdaq, whose technology-heavy composition carries longer-duration cash flow profiles that tend to be more vulnerable to higher discount rates. Conversely, a soft or in-line print should further reduce the risk of Fed tightening and provide the Nasdaq with another boost.
Nasdaq Technical Analysis – Daily Timeframe
On the daily chart, the Nasdaq is consolidating below the key swing level at 30,065. Sellers are stepping in at that level with defined risk above it, positioning for a drop toward the 26,300 support. Buyers, meanwhile, will want to see a break higher to increase bullish bets into new record highs.
Nasdaq Technical Analysis – 4-Hour Timeframe
On the 4-hour chart, recent price action has formed a symmetrical triangle. A breakout on either side would typically be followed by a more sustained trend. Buyers will continue to lean on the bottom trendline, targeting an upside breakout, while sellers will lean on the top trendline to position for a downside break.
Nasdaq Technical Analysis – 1-Hour Timeframe
On the 1-hour chart, there is little to add, as traders will likely wait for the US CPI release before taking new positions. The red lines define the average daily range for today.
Upcoming Catalysts
- Today: US CPI report
- Tomorrow: US PPI data and the latest US Jobless Claims figures
- Friday: US Retail Sales and the University of Michigan Consumer Sentiment report
