Nasdaq Composite stuck in 3-day range below 23,700 as traders await FOMC decision

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Nasdaq consolidates ahead of FOMC

Highlights

Nasdaq trades between 23,450 and 23,700 as traders await fresh Fed policy signal
50 EMA near 23,440 supports short-term structure during tight consolidation phase
Treasury auction demand surge hints at stronger liquidity that may lift equities higher

During Wednesday’s premarket session, Nasdaq futures showed no strong directional bias. An early decline of 0.25% was followed by a 0.4% rebound, but gains were later erased as futures turned lower by more than 0.5%. This back-and-forth activity highlights market tension ahead of the FOMC rate decision. The futures market is currently pricing in a quarter-point cut, and that expectation has become the primary influence on near-term sentiment. At the moment however, intraday performance stands at 0.2% loss, while the week-to-date decline is 0.6%.

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

From a technical perspective, the consolidation is supported by the 50 EMA on the 1-hour chart, now positioned at 23,440. This level coincides with the lower end of the consolidation range and provides near-term support for the Nasdaq. The 4-hour RSI has hovered above the 50 level since Monday, reflecting a neutral posture as investors shift to a wait-and-see mode.

Strong Treasury demand points to improving liquidity that may support equities

On the macro front, Tuesday’s $39 billion auction of 10-year Treasury bonds showed strong investor demand. The bid-to-cover ratio of 2.55 ranked among the highest in the last 50 auctions. According to Exante Data, end-user demand, combining direct and indirect bids, was well above average. The yield spike to 4.19% made the issuance attractive and suggested that liquidity conditions are improving. This could be a foundational driver for equity markets, as increased liquidity typically supports risk assets.

Should the Federal Reserve announce a rate cut and also hint at additional liquidity measures such as Treasury bill purchases in January, equity markets could get an extra lift. Such a move would signal the Fed's intent to maintain ample reserves in the financial system. This would ease funding pressure in money markets and could trigger a breakout in the Nasdaq Composite toward the next psychological level near 24,000.

In recent analysis, we discussed how the Nasdaq reversed from 23,700 as tech and semiconductor losses dragged the index lower. Nasdaq futures fell 100 points in premarket trade before ADP and JOLTS data releases.

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