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Nasdaq 100 Forecast: Biden Drops Out, Tech Stocks Bounce Back

Article By: ,  Head of Market Research
July 23, 2024 5:23 AM

Nasdaq 100 Key Points

  • President Biden has dropped out of the 2024 Presidential race, leaving Kamala Harris as the presumptive US Presidential nominee.
  • Former President Trump is still seen as the odds-on favorite to win the presidency, though some elements of the recent “Trump Trade” are moderating today.
  • The Nasdaq 100 is bouncing off 50-day EMA support – key resistance looms at 20K, with support at 18,900 and 18,400.

You almost certainly don’t need another non-political pundit opining on this weekend’s developments, so we’ll stick to the facts:

  • President Biden, the presumptive Democratic nominee for President in the 2024 election, dropped out of the race Sunday afternoon
  • He then endorsed his current Vice President, Kamala Harris, to be the candidate
  • Harris has secured (and is securing) the endorsements of many Democratic bigwigs as we speak
  • While not technically confirmed until the Democratic National Convention on August 22, political betting markets are pricing Harris as nearly 90% likely to be the Democratic nominee.
  • Harris has yet to name a Vice President running mate, with betting markets currently favoring Josh Shapiro, Andy Beshear, Roy Cooper, or Mark Kelly
  • Former President Donald Trump is still seen as the odds-on favorite to win the election in November, though his perceived odds have fallen from the mid-60% range to closer to 60% after this weekend’s developments.

Perhaps most interestingly for traders, the market reaction to the political drama has been limited as many traders were already pricing in the potential for Biden to drop out. We are seeing a very slight unwind of the so-called “Trump Trade,” with US Treasury yields ticking higher and the technology-focused Nasdaq 100 index outperforming other major US indices.

Nasdaq 100 Technical Analysis – NDX Daily Chart

Source: TradingView, StoneX

Speaking of the Nasdaq 100, NDX is bouncing back off its rising 50-day EMA following last week’s big swoon. While last week’s break of bullish trend line support is significant, the longer-term trend remains intact, with the 50-day EMA and 200-day SMA still rising at a solid rate.

If the earnings results in the coming weeks (starting with Alphabet and Tesla tomorrow afte the bell) are able to meet or beat expectations, the tech-heavy index could regain the 20K handle and potentially retest the record high near 20,700 in short order. However, if weak earnings reports start to accumulate and the index is unable to recapture the 20K level, it could set the stage for a continuation down toward levels of previous-resistance-turned-support at 18,900 and 18,400 as we move through the dog days of summer.

-- Written by Matt Weller, Global Head of Research

Check out Matt’s Daily Market Update videos on YouTube and be sure to follow Matt on Twitter: @MWellerFX

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