Nasdaq Composite to extend four-day rally toward 23,800 as Fed cut bets strengthen

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Nasdaq futures hold gains ahead of Fed rate cuts.

Highlights

Nasdaq builds on fourth consecutive daily gain as weaker inflation data strengthens dovish policy expectations.
Nasdaq RSI confirms bullish momentum as traders await potential Fed rate cut decision.
Key resistance near 23,800 could define the next breakout zone toward the 24,000 all-time high.

The backdrop for this recent upside traces back to key inflation and consumer data released on Friday. According to the U.S. Department of Commerce, the core PCE inflation for September rose by only 0.2%, bringing the annual rate to 2.8%, slightly below forecast. This softer reading, combined with labor market weakness, strengthened bets that the Federal Reserve may begin rate cuts sooner than previously anticipated.

Further support came from the University of Michigan’s delayed report, which showed only mild increases in consumer prices. Together, these data points ignited intraday buying interest on Friday and laid the foundation for Monday’s early gains.

Nasdaq price dynamic (June - Dec 2025). Source: Tradingview

Structurally, the Nasdaq Composite has carved a sequence of higher highs and higher lows since the final week of November, reclaiming the 20, 50, and 100 EMAs. Short-term charts confirm this pattern, where the 20 EMA on the 1-hour timeframe served as repeated support throughout last week. The current positioning of this moving average at 23,500 provides a critical intraday support base just below the current price action.

FedWatch shows 88% probability of rate cut as investor optimism builds

Momentum indicators further support the bullish case. RSI readings on both the hourly and daily charts sit comfortably in bullish territory, indicating sustained upward drive. Technically, the index is not only holding recent gains but is also positioned above key trend indicators, reflecting sustained participation and buying interest.

Expectations for a dovish policy shift are also weighing in heavily. CME FedWatch data now shows 88% probability of a 25-basis-point cut on Wednesday, compared to just 30% one month ago. Among 108 analysts polled by Reuters, only 19 expect a hold. This tilt in market sentiment has provided a fundamental tailwind for Nasdaq bulls, aligning monetary expectations with technical strength.

The key resistance zone lies around 23,800, which marks the start of a fair value gap from November. This level may attract price action in the coming sessions, especially if current support levels continue to hold and economic data does not reverse the market’s dovish bias. A successful push through this zone could open the path towards the all-time high near 24,000.

In recent analysis, we discussed how the Nasdaq Composite hit a four-week high as Meta and Salesforce sparked a premarket rally. The index broke above the 23,570 supply zone, climbing past 23,600 and closing in on its 24,000 record high.

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