Nasdaq Bounces After CPI: Markets Price 100 Basis Points of Hikes

The show opens by recalling the heavy selling that followed a hotter-than-expected PPI print, which left all eyes on today's CPI release. Headline inflation at 3.4% and core at 2.4% matched consensus almost exactly, with only the monthly core reading a touch above forecast. Drilling into the basket, the headline index came in at 334.98 against 334.85 expected, while the core index moved from 336.79 toward 337. In the presenter's view, these after-the-comma differences are far too small to justify lasting market anxiety.

The real story is not the data but the market's reaction to it. The CME FedWatch screen shows an 85% probability of a 25-basis-point hike at the September 16 meeting, followed by a second hike priced at 82% for December, a third at 75% for March, and a fourth at 51% for next September. That stacks up to 100 basis points of tightening pre-priced into the coming twelve months. The presenter openly calls this excessive and stresses that four hikes over a one-year horizon will not materialize.

The objection rests on two arguments. First, the headline strength is energy-driven: the basket swells while oil is elevated, but core at 2.4% tells a much calmer story. Second, market rates have arguably done the tightening already, with the 2-year yield at 4.59% and the 10-year at 4.93% while the policy rate sits at 3.5% against 2.4% core inflation, which makes adding another 100 points look odd. The presenter adds that part of this pricing may be a mechanical echo of hedging positions in the options market rather than a genuine macro conviction.

The oil backdrop is genuinely hectic. The Houthi seizure of a critical Red Sea port city triggered a sharp spike in crude, and 120-dollar scenarios started circulating again. But on the recording day prices pulled back more than 4%, with five separate negative divergences forming on the technical picture. That the move happened right into a strong resistance zone suggests to the presenter that large players overpriced the fear. Friday's tape supports that read, with Brent easing about 2.5% toward 105 dollars while US indexes gained over 1%.

On the Nasdaq side, the candle turned up after yesterday's heavy selling. The index keeps the uptrend it has carried since mid-April and draws strength from holding above the support zone near 28,870. The presenter expects one final upward wave toward the resistance band, lasting anywhere from four sessions to a week and a half. Behind that call stand both the bounce off support and momentum gauges turning higher, though he cautions this may prove a relief move rather than trend continuation.

Seasonality and politics sit side by side on the medium-term calendar. Late September and October are flagged as months when selloffs often arrive in midterm cycles, normally followed by a dip into the election and then a recovery. Two forces could break that script: Treasury Secretary Scott Bessent's strikingly confident tone on rates, and the administration's reluctance to enter the election with a deeply lower stock market. Bessent casting himself as the one who beats the house, backed by the Treasury's broader data access, is relayed with cautious seriousness.

The US 10-year touching 4.99 near the 5% mark before easing suggests tension is starting to drain on the bond side as well. That Bessent comes from the trading floor rather than academia matters to the presenter: the confidence of someone who has read markets from the inside is not the same as confidence built on theoretical models. So even though the backdrop looks negative, the Treasury's next move should not be dismissed lightly. Calm self-assurance in finance, he adds, beats both panic and blind optimism.

The S&P 500 mirrors the Nasdaq: holding near 7,585, still carried by the buy signal from mid-April, with a possible move toward the 7,770 to 7,800 band on the table and support at 7,575 below. On the Nasdaq, the turn from the 29,000 zone coincides with one of those periods when the repaint-prone momentum gauge is considered reliable on daily and weekly charts; it turned from a similar spot in May. The presenter frames this as a probability to keep in mind, not a certainty.

Caution dominates the single-stock and thematic-fund tour. On the Nasdaq, which has bounced back to the level where the super-trend flipped to sell, the 2,344 boundary is watched: the setup favors waiting, not fresh buying. In the portfolio's space names the 145 support and 155 resistance band is tracked, with a similar wait-and-see stance on Rocket Lab. The semiconductor fund SMH faked out above 563 and fell back, leaving strong resistance at 580; ACV sits below the 103 resistance after its sell signal with no new purchase advised. The memory-chip fund watches 62 as resistance and the 54 to 52 band as support, with 58 named as the stop-loss line.

The closing strategy is crisp: keep what you hold, add no fresh risk. This is not an environment that rewards risk appetite; if the election process or its aftermath drags SMH toward 500, the software fund IGV into the 76 to 84 band, or the Nasdaq toward 27,000, far healthier entries could open up. The presenter marks the Thursday and Friday after the Fed decision as reassessment days, openly saying sales may be warranted then. If Bessent's plan works, the expected autumn correction may never arrive; if it fails, the supports get tested again.