Nasdaq 100 Forecast: QQQ rises above 20k as MU revives AI enthusiasm

US futures

Dow future 0.53% at 42126

S&P futures 0.84% at 5770

Nasdaq futures 1.66% at 19232

In Europe

FTSE 0.43% at 8295

Dax 1.64% at 19232

• Nasdaq leads the gains, S&P 500 & Dow Jones at record levels
• Micron Technology revives enthusiasm for the AI trade
• US jobless claims & durable goods orders are stronger than expected
• Oil falls 5% in two days as Saudi Arabia abandons its $100 pb target

Jobless claims fall to a 4-month low, Micron Technologies impresses

U.S. stocks are heading higher, led by the Nasdaq 100, amid a revived euphoria surrounding artificial intelligence and an upbeat mood after the pledge of more Chinese stimulus. Meanwhile, investors are also looking forward to a speech by Federal Reserve chair Jerome Powell.

Optimism surrounding AI has taken a back seat recently amid Fed rate cuts and China stimulus pledges to attract attention. Still, today, a 14% jump in Micron technology has put the sector back under the spotlight.

The S&P 500 and the Dow Jones have hit multiple record highs since the start of the year; meanwhile, the tech-heavy Nasdaq 100 is around 3% from its previous record high.

Expectations of falling interest rates have driven the rally in U.S. stocks, particularly after the latest data, which also suggests that the US economy is still heading for a soft landing.

Data today showed that jobless claims were 218k, down from 222k the previous week and at a four-month low. Applications for US employment benefits remain low despite a recent slowdown in hiring.

Attention now turns to Federal Reserve chair Jerome Powell, who is scheduled to speak later today along with New York Fed President Williams and other Fed officials. The market will be watching for clues over the outlook for the US economy and the future path for interest rates.

The market is pricing in a 62% probability of the Fed cutting rates by 50 basis points in the November meeting compared to a 38% likelihood of a 25 basis point cut.

Corporate news

Micron Technology is set to open 16% higher after the chipmaker revealed stronger-than-expected current quarter revenue guidance thanks to soaring demand for its memory chips used in AI applications.

Accenture is set to open 4% higher after the professional services company beat quarterly earnings and revenue forecasts even as it expects annual revenue below Wall Street estimates.

CarMax is set to open 7% lower after the used car retailer booked solid second-quarter sales, but these were not enough to offset pressure on its car loan business.

Nasdaq 100 forecast – technical analysis.

The Nasdaq 100 has extended its breakout from the symmetrical triangle pattern, rising above 20k and reaching fresh 6-week highs. Buyers will now set their sights on 20,750. Immediate support is seen at 20k. Below here, the 50 SMA and falling trendline support come into focus at 19,200.

FX markets – USD falls, GBP/USD falls

USD is falling as it hovers around a 14-month low amid an upbeat market mood and is ahead of Federal Reserve chair Jerome Powell's speech later today.

EUR/USD is riding after stronger-than-expected German consumer confidence. The crazy watch index rose slightly to -21.2, up from -21.9, beating expectations. However, this compares to the severe decline in the previous months, so it should be interpreted more as a stabilisation at a lower level rather than starting a notable recovery.

GBP/USD is rising towards 1.34, boosted by BoE-Fed monetary policy divergence after hawkish comments from BoE member Megan Greene yesterday. News that UK PM Starmer is due to meet the European Union president Ursula von der Leyen next week to discuss resetting ties with the union is adding support. However, concerns over the upcoming UK Budget could limit GBP/USD gains.

Oil tumbles as Saudi Arabia abandons $100 per barrel target

Oil prices have fallen for a second straight day, with oil down 5% over the past 48 hours.

Oil prices are falling following a report in the Financial Times that Saudi Arabia is preparing to abandon its $100 per barrel crude target ahead of an increase in output. This indicates that the world’s largest oil producer is resigned to low oil prices.

Saudi Arabia and seven other members of the OPEC+ group were due to unwind longstanding production cuts from the start of next month; however, a two-month delay has fuelled questions over whether the group will be able to raise output.

Reports from Saudi Arabia suggested that the Kingdom is committed to bringing back production as planned on December 1st, even if that means a period of lower prices.

These moves represent a significant shift in strategy for Saudi Arabia, which has been leading other OPEC members in cutting output since November to maintain higher prices.