Nasdaq Composite closes above 23,700 for first time since November

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Investors await inflation and earnings report

Highlights

Nasdaq breaks above 23,700 as Alphabet rally offsets Powell-linked selloff concerns
Tuesday’s CPI and JPMorgan earnings may determine if the bullish breakout holds or fades
Favourable CPI report could lift Nasdaq to 24,000, while exceeding the inflation print risks a sharp pullback

The index settled at 23,734 on Monday after rebounding from a temporary selloff earlier in the session. That earlier weakness was triggered by news of a criminal investigation into Fed Chair Jerome Powell, which raised concerns about institutional stability. However, the index reversed course as Alphabet’s sharp price rally lifted broader tech stocks, pushing Nasdaq past the key ceiling that had capped prices since late last year.

Nasdaq Composite price chart (Sept 2025 - Jan 2026). Source: Tradingview

Monday’s close confirmed a breakout from a rising triangle formation that has been forming since November. The 23,700 zone had served as the upper boundary of the structure, consistently rejecting bullish attempts until Monday’s close marked a decisive shift. The move reflects growing confidence in tech-led earnings growth and the macro environment supporting risk-on flows.

Strong Q4 earnings may extend the risk-on trend if CPI supports the rate cut outlook

Today’s inflation data could validate or disrupt that breakout. The forecast for month-over-month core CPI stands at 0.3%, slightly higher than the previous 0.2%, while the annual headline reading is expected to match the prior figure of 2.7%. Since traders and the Federal Open Market Committee often prioritize the core figure, any upside surprise may challenge the current rally in equities.

Market participants also expect Q4 earnings to reflect solid economic conditions. Recent GDP prints and stable job growth have helped firms maintain profit margins, particularly across technology and financials. Analysts expect the new earnings cycle to reinforce the broader bullish trend for the Nasdaq, especially if inflation data supports the case for eventual rate cuts.

Nasdaq upside toward 24000 hinges on CPI miss and strong earnings signals

If the CPI data comes in softer than forecast, Nasdaq could stretch the breakout toward the 24,000 zone. The 1-hour 20 EMA currently reinforces the 23,700 level, and a bounce off this region could serve as a launchpad for bullish extension supported by earnings optimism. Price action above 23750 may open up room for price discovery toward previous all-time highs.

Conversely, market participants may trim risk exposure if the CPI reading exceeds expectations, causing the Nasdaq to fall back below 23,700. In that scenario, immediate support lies near the 50 EMA at 23600, while the lower boundary of the rising trendline around 23,500 may act as the final cushion to preserve the broader uptrend.

In recent analysis, we discussed how the Nasdaq Composite dropped over 1.2% after reports suggested Trump threatened Fed Chair Powell. Political interference fears unsettled rate policy expectations and triggered a tech-led futures selloff.

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