Nasdaq Comp daily
The rout in the Nasdaq late last week is unwinding as the market gets a (somewhat) clearer view on the Middle East.
Israel started its ground offensive late on Friday and it didn’t trigger the opening of a second front, at least not yet. It also appears that the US isn’t backing a broader fight that could spill over to Iran.
Of course, that’s all extremely fluid and some of the comments from Turkey are worrisome but for now, the market is breathing something of a sigh of relief.
Mixed in with that are likely some month-end flows and dip buying on softer eurozone inflation.
The Nasdaq is leading the way with a 1.5% rally today on strength from Meta (+3.4%) as it tries to roll out ad-free subscriptions. Amazon is also continuing its rebound from Friday with a 3.4% rally and Microsoft is up 2.7% as the Magnificent 7 re-assert themselves.
Be careful with this rally as oversold bounces can be strong but they can also fade quickly. A sustained bounce will need some help from the Fed, or at least the bond market.