Varun Takkar
Stock & Options Trading, Technical Analysis, Trading Community
Renewed inflation raises the risk of a December rate hike and downside for the Nasdaq 100. Per Wall St Engine, core PCE reached 3.1% year over year, up from 3.0%, and rose 0.3% month over month, up from 0.2% previously. CPI, PPI and PCE are all rising again; a December hike is the bet. x.comÂ
Disappointing big-tech earnings make a near-term QQQ drop a concern despite the absence of the expected FOMC selloff. Under Warsh's first two FOMC meetings, QQQ fell 1.2% and 1.4% on meeting day, then rose 1.5% and 1.7% the next day. That flush-then-rebound playbook depended on history repeating; this meeting did not deliver the initial drop. x.com x.comÂ
Hotter-than-expected inflation is pressuring the Nasdaq as yields rise. September CPI reached 3.7%, above the 3.6% forecast; hot oil, rising rates and the active Iran war accompanied the Nasdaq's 2% drop. The Nasdaq also failed to hold 745. x.com x.com x.comÂ
Forward risks matter more than good earnings for the Nasdaq now. The index looks to be topping and has a good shot at 28,000 before a rally after the midterms; tomorrow's PCE and GDP releases are unlikely to help, and this week's lows could break. x.com x.comÂ
Faster-than-expected US growth is encouraging for stocks, though inflation remains elevated. Q3 GDP rose 3.4% versus 3.2% expected, while the GDP price index rose 2.2% versus 3.2% forecast; PCE inflation matched expectations. x.comÂ
US stocks face a potentially bigger selloff as rising inflation compounds concerns about AI spending. PCE inflation reached a four-month high of 3.6%, increasing pressure on the Fed to raise rates; Alphabet shares fell after disappointing earnings, slowing ad growth and more than $51 billion of quarterly capital investment. x.comÂ
The Nasdaq 100 faces short-term downside because a failed push to a new high leaves crowded bullish sentiment vulnerable to a break below. Despite record institutional accumulation and a long-term bullish position, five months of chop, a failed ATH and an attempted loss of the bullish trend favor hedging rather than adding leverage. x.com x.comÂ
US large-cap stocks are rising because inflation is cooling, which lets Fed Chair Warsh hold steady if Friday's jobs data cooperates. Per @wallstengine, core PCE rose 3.0% year over year versus 3.3% expected and headline PCE 3.4% versus 3.7%, while Q2 GDP came in at 2.2% versus 1.5%. x.comÂ
The CPI release crushes hopes of a near-term rebound in the S&P 500 and Nasdaq 100. x.comÂ
Higher transport and input costs threaten US stock margins and demand. The PPI surprise shows the oil-cost pressure described in March playing out: headline rose 1.3% monthly versus 0.6% expected, and core 0.7% versus 0.3%. The March scenario put logistics costs at 3-6 weeks and consumer prices and weaker demand at 1-3 months; margins could shrink 100-300 basis points if costs cannot be passed on. The full scenario was not expected to play out. x.com x.comÂ
A breadth thrust and fresh buying point to at least a multi-week rise in US indices, most probably a big rally for a few months after the midterms. LS Breadth is flipping bullish as the bear count falls; more stocks are starting uptrends and first consolidations. The Nasdaq 100 is bouncing with strong breadth, and the S&P 500 looks ready to leave a massive base. The Nasdaq 100 could sell off at declining averages but should rise if broad selling does not return. x.comÂ
US stocks benefit when rates rise with growth because earnings outpace the drag from higher discount rates. Such periods have historically been very bullish, unlike inflation-led rate rises amid slowing growth. Since fall 2025 the 10-year yield rose from 4.1% to 5.1% while nominal GDP growth accelerated to 6.6%, faster than rates. Being long offers better risk/reward; high oil prices due to the war are the remaining inflation pressure, and an end to the war would improve the setup further. x.comÂ
