Nasdaq Composite recovers from Trump shock as earnings and July seasonality lift sentiment
Nasdaq closed at a new record high at 20,730
The Nasdaq Composite Index staged an impressive reversal on Wednesday, erasing an early selloff triggered by reports that President Donald Trump was considering firing Federal Reserve Chair Jerome Powell.
The index initially dropped over 1% in reaction to the rumor, continuing Tuesday’s pullback from the all-time high of 20,836. The dip reached a session low at 20,500 before buyers stepped in around the 4-hour 20 EMA, which provided firm technical support.
- Nasdaq closed at a new record high at 20,730 after bouncing from session low at 20,500
- Trump denied Powell firing rumors which triggered sharp recovery from early 1% loss
- Strong earnings and July seasonality continue to support bullish sentiment
As Trump later denied the reports, U.S. equities bounced back sharply. The Nasdaq recovered all its earlier losses and advanced 0.3% to close at 20,730, setting a new record close above Tuesday’s finish at 20,670. Most sectors finished higher on the day, led by strong performance in health care, while energy lagged behind.
NASDAQ price dynamics (June - July 2025). Source: TradingView
The recovery was also driven by strong corporate earnings, which continue to reinforce investor confidence. Johnson & Johnson, Omnicom, Morgan Stanley and Goldman Sachs delivered stronger-than-expected earnings reports. These earnings update, especially from the financial and healthcare sectors, played a key role in supporting risk appetite and lifting major indices.
Nasdaq RSI holds above 70, but seasonality and earnings bolster the upside outlook
Adding to the bullish outlook is the seasonality of July. Historically, July tends to be one of the best-performing months for U.S. equities, partly due to increased corporate share repurchase activity. This seasonal factor, along with upbeat earnings, has helped investors look past the policy uncertainty from Trump’s tariff threats and the temporary overbought signal on the daily RSI, which has pushed above 70.
As of Thursday, July 17, ahead of the U.S. cash session, the Nasdaq Composite is mildly higher by 0.06%. Traders are watching whether the index can build on Wednesday’s strength and post another higher daily close. A new all-time high above 20,836 is also in sight, provided momentum carries through.
Short-term support lies at the 1-hour 20 EMA around 20,686. Holding above this level would suggest buyers are still in control. Failure to defend that support could open the door to a minor pullback, but so far, broader sentiment and technical structure continue to favor further upside.
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