Nasdaq 100 Forecast: QQQ rebounds after CPI cooled by more than forecast

US futures

Dow future 0.7% at 41710

S&P futures 1.1% at 5633

Nasdaq futures 1.6% at 19670

In Europe

FTSE 0.5% at 8533

Dax  1.5% at 22710

• US CPI eased to 2.8% YoY from 3% in January
• Trade war fears and recession worries could limit gains
• Oil rises, but the outlook remains weak

Stocks rise as the Fed moves closer to another rate cut

US stocks are soaring ahead of the open after cooler-than-expected US inflation data keeps Fed rate cut hopes alive, even as trade tensions escalate.

US CPI eased to 2.8% YoY in February, down from 3% in January and below the 2.9% forecast. On a monthly basis, CPI cooled to 0.2% from 0.5%. Underlying inflation unexpectedly eased to 3.1% from 3.2%.

The data brings the Federal Reserve closer to cutting interest rates after the central bank paused rate cuts at the start of the year, insisting that further signs of inflation cooling were needed to resume rate cuts.

Cooling inflation also brings some relief to the market, which had been fretting over the impact of Trump’s trade tariff policies, fearing they could add inflationary pressures and slow growth. Recession fears caused a deep selloff in US equities in recent sessions. However, cooling inflation would mean the Fed could still cut rates to support the economy. The next rate cut is seen in June.

Still, trade tensions and uncertainty over the economic outlook could keep a lid on gains. After some flip-flopping, Trump pressed ahead with 25% tariffs on steel and aluminum imports into the US. The US is facing retaliatory tariffs from the EU, Canada and China.

Corporate news

Tesla is trading over 3% higher after rising 4% on Tuesday. President Trump signaled his intentions to buy a Tesla, and Morgan Stanley recommended buying on the dip. These gains come after Tesla dropped over 15% on Monday.

Intel is set to open 8% higher on reports that TSMC raised a joint venture proposal to US chipmakers NVIDIA, AMD, and Broadcom to operate Intel's foundry division. These chipmakers were also up before the bell.

GE Aerospace is set to open modestly higher after saying it would invest almost 1 billion in its US factories and supply chain in 2025 to increase the use of new parts and materials in operations. It also said it would hire 5,000 US workers this year in manufacturing and engineering.

Nasdaq 100 forecast – technical analysis.

The Nasdaq has rebounded from the 19,115 low reached yesterday, recovering above 19,600, bringing the RSI ot of oversold territory. The long lower wick on the candle suggests that selling demand was weak at the lower levels. Buyers will look to extend gains towards 20k. However, it would take a rise above 20,300 the 200 SMA to negate the near trm selloff. Sellers would need to break below 19,100 to create a lower low.

FX markets – USD falls, EUR/USD rises

The USD is edging lower after inflation data hovered around a five-month low amid recession worries and escalating trade tensions with key trading partners.

EUR/USD is falling as investors weigh up a mixed news docket. While optimism surrounding a possible cease-fire in Ukraine offers some support to the EUR, this is being overshadowed by news of retaliatory tariffs with  €26 billion in countermeasures on US imports. ECB President Christine Lagarde spoke earlier and warned that global trade shifts and increases to defence spending will make it harder to keep inflation stable.

GBP/USD is little changed on Wednesday despite the US applying trade tariffs on steel and aluminium imports from the UK. The government has said that it doesn’t intend to respond with retaliatory tariffs. The US is the UK’s second most important steel export market after the EU.

Oil rises, but outlook remains weak

Oil prices rose on Wednesday, adding to yesterday's modest gain. However, the upside could be capped amid ongoing worries about the demand outlook and ample supply.

Oil has picked up from multi-year lows in recent days, boosted by a softer U.S. dollar and the EI playing down calls of a strongly oversupplied market this year.

Still gains me be limited, given fears of a US recession and tariffs affecting key markets such as China. The weaker demand outlook comes as OPEC+ will increase output from April.

Meanwhile, moves towards a ceasefire between Russia and Ukraine could also cap oil gains. Any signs of a peace deal could see the US remove sanctions on Russian oil.