Nasdaq 100: September Puts the Rally to the Test

The Nasdaq 100 is entering the final part of the summer with a considerably more complex setup than in previous months. The recent sell-off in technology stocks, particularly pronounced in semiconductors, has not yet compromised the index’s structural trend, but it has brought investors’ attention back to valuations, bond yields and the sustainability of artificial intelligence investment.

The key issue is changing: the market no longer wants to know only how much Big Tech will invest in AI, but above all what economic returns those investments will generate.

Treasuries and technology: a relationship to watch

One of the main headwinds for the NAS100 is coming from the bond market. During the recent correction, the yield on the 30-year U.S. Treasury reached approximately 5.34%, a particularly challenging level for growth-stock valuations.

The mechanism is relatively straightforward: higher yields increase the discount rate applied to future earnings while simultaneously making bonds more competitive relative to equities.

For this reason, over the coming weeks it will be important to monitor not only Wall Street but also the Treasury market. A stabilization in yields could encourage renewed buying in the technology sector, while another acceleration could put further pressure on valuation multiples.

Nvidia and Broadcom: two tests for the AI cycle

The first major event arrives on August 26 with Nvidia.

Expectations are high: the market is looking for quarterly revenue of around $92 billion, but guidance will probably determine the stock’s real reaction and, indirectly, that of the Nasdaq 100.

Investors will be looking for indications on Data Center growth, margins and, above all, whether demand for AI accelerators can maintain its current pace.

The options market is pricing in a move of approximately 5.4% in Nvidia following the results, enough to generate swings worth hundreds of billions of dollars in market capitalization.

A few days later, a second important test will arrive: Broadcom will report earnings on September 2. The combination of the two earnings releases will provide an interesting assessment of the broader AI infrastructure ecosystem, from processors and networking to custom chips designed for data centers.

Salesforce, Marvell and Workday will also deserve attention over the coming weeks, although Nvidia and Broadcom carry significantly greater weight in shaping sentiment across the technology sector.

The NAS100 needs to defend the 29,000 area

From a technical perspective, the correction has weakened short-term momentum without, at least for now, triggering a genuine reversal of the primary trend.

The first particularly important area lies between 29,000 and 28,700 points. Holding this range would keep the consolidation-and-recovery scenario alive.

On the upside, a recovery above 29,800 points would represent an initial positive signal. The real test, however, remains the 30,300–30,600 area, where the NAS100 would need to break above its previous highs to return to a clearly bullish configuration.

Conversely, a confirmed break below 28,700 could initially extend the correction toward 28,400 points.

September adds seasonal risk

The correction is also occurring at a statistically unfavorable time of year.

September has historically been one of the most difficult months for Wall Street, with the Nasdaq’s average monthly return estimated at around -0.8%.

Seasonality, of course, is not a forecast. It becomes more relevant, however, when it coincides with elevated valuations, profit-taking, persistently high bond yields and an unstable geopolitical environment.

Against this backdrop, any rebound could be accompanied by greater volatility than that observed during the first part of the year.

Iran, oil and inflation: the connection with the Nasdaq

Geopolitics also remains an important background factor.

Tensions between the United States and Iran, together with uncertainty surrounding the Strait of Hormuz, continue to maintain a risk premium in energy markets. With Brent and WTI recently trading at approximately $92 and $85 per barrel, respectively, a further acceleration in oil prices could complicate the U.S. disinflation process.

For the Nasdaq, the transmission mechanism is indirect but important:

higher oil prices → higher inflation → higher Treasury yields → pressure on growth-stock valuations.

A geopolitical de-escalation could therefore benefit the technology sector by reducing inflation expectations and bond yields.

The Fed and inflation complete the picture

Alongside technology earnings, the macroeconomic environment will also play a decisive role.

Markets are watching core PCE, with expectations of approximately +0.2% month-on-month and +3.2% year-on-year, as well as signals coming from the Federal Reserve.

For the NAS100, the ideal scenario remains a soft landing: gradually declining inflation, moderate economic growth and still-resilient corporate earnings.

Higher-than-expected inflation could put renewed upward pressure on Treasury yields. Excessively weak economic data, on the other hand, could transform expectations of interest-rate cuts into concerns about economic growth.

The next few weeks will be decisive

The outlook for the Nasdaq 100 therefore remains constructive over the medium term, but considerably more selective in the short term.

The market appears to have entered a new phase of the AI cycle: announcing billions of dollars in investment is no longer enough. Investors now want to see revenue, margins, cash flow and returns on capital.

Nvidia and Broadcom will provide two important tests of this thesis, while Treasury yields, inflation and geopolitics will continue to determine how much investors are willing to pay for future growth.

For the NAS100, the 28,700–29,000 area therefore represents the main defensive zone, while a recovery above 29,800 and subsequently 30,300–30,600 could indicate that the recent sell-off was primarily a rebalancing of valuations.

September could provide the answer: is this simply a pause in the technology rally, or the beginning of a deeper consolidation phase?

Disclaimer: This article is for informational purposes only and does not constitute investment advice, solicitation or an investment recommendation. Financial markets involve the risk of capital loss.