Nasdaq Composite hits record 21,700 as tech stock led gains amid CPI easing
The Nasdaq Composite Index surged 1.4% on Tuesday to a record high of 21,700, extending its upward trajectory after finding technical support at the 1-hour 20-EMA near 21,400.
The rebound gained momentum following the release of the July CPI report, which showed headline inflation at 2.7% year-on-year, slightly below the 2.8% forecast, while core CPI rose 3.1%, matching expectations. This inflation profile eased concerns over tariff-driven price pressures, encouraging equity buying, particularly in the technology sector.
Highlights
-Nasdaq jumps 1.4% to record 21,700 after CPI data eases inflation worries
-Fear of tariff-driven price pressure fades as rate cut odds climb to over 90%
-RSI hits 70 and support at 21,555 could attract dip buyers if prices pull back
The move was supported by strength across the Magnificent Seven, where all members closed higher. Meta Platforms led with a 3.2% jump to $790 per share, setting a new record and bringing its market capitalization nearer to $2 trillion mark. By contrast, Amazon’s performance was subdued, adding just 0.1%, the least among its peers.
Nasdaq price dynamic (June - August 2025). Source: Tradingview
Investor sentiment was further buoyed by an increase in September rate-cut odds, which climbed to over 90% from 85% before the CPI release. Expectations for lower borrowing costs typically support technology stocks by reducing debt servicing expenses and improving valuations, while also enabling easier access to capital for growth initiatives in AI, cloud services, and research and development.
Nasdaq overbought risk rises as RSI reaches 70 on Tuesday’s advance
From a market participation perspective, the IXIC rally on Tuesday was accompanied by relatively high trading volume, though lower than the preceding four days. This suggests strong buying interest but not at the same intensity as earlier in the week.
On the technical front, the daily Relative Strength Index for the Nasdaq Composite touched the 70 threshold following Tuesday’s advance, indicating the index is approaching overbought conditions. A continuation of the rally today would push the RSI deeper into this zone, potentially inviting short-term profit-taking unless fresh catalysts emerge.
Immediate support for the index sits at Monday’s high of 21,555. This level could attract dip-buyers should prices retrace, offering a base for renewed upside attempts. Overall, the combination of macroeconomic relief from softer inflation data, high investor confidence in mega-cap tech, and strong technical momentum continues to define the near-term outlook for the Nasdaq Composite.
Nasdaq dropped after the ISM Services Index missed expectations and raised fresh stagflation concerns. The index stalled at 21,060 as RSI signalled more sideways movement.
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