Nasdaq Composite eyes record highs above 21,880 as Fed cut expectation rises

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08.09.2025

Nasdaq Composite eyes record highs above 21,880 as Fed cut expectation rises — Fed policy bets support further gains in Nasdaq

The Nasdaq Composite Index ended last week on a mixed note after reaching a record high of 21,880 before profit-taking forced the index lower.

The sell-off pulled the benchmark down to a session low of 21,540 before it eventually settled at 21,700, a modest daily decline of 0.05%. Despite Friday’s red close, the index still managed to record weekly gains of 1.14%, offering a bright start to a month that is historically known for weakness in equities.

- Nasdaq closes 21,700 weekly gain as traders price aggressive Fed rate cuts.

- RSI momentum stays bullish, reinforcing Nasdaq’s resilience after brief profit-taking.

- Nasdaq futures rise 0.3% as weaker jobs data boosts easing expectations.

The latest performance shows how investor sentiment is currently being shaped by expectations around Federal Reserve policy. A weaker-than-expected nonfarm payrolls report released on Friday heightened concerns about the state of the U.S. labor market. The disappointing data led traders to raise their bets on monetary easing, firming expectations that the Fed could deliver a 25-basis-point rate cut at its upcoming September 16–17 meeting.

Nasdaq price dynamic (July - Sept 2025). Source: Tradingview

According to CME Group’s FedWatch tool, the probability of such a move now stands at 90%. A larger 50-basis-point reduction has also entered the discussion, underscoring the dramatic shift in market positioning compared to the absence of such bets prior to the jobs report.

Nasdaq futures gain 0.3% as investors price September Fed rate cut

This shift in expectations created a supportive backdrop for Nasdaq futures at the start of the new week. On Monday, September 8, futures edged higher by 0.3% as investors leaned into the idea that easing financial conditions would help sustain equity valuations. The Fed’s “blackout” period, which restricts officials from making public comments before the policy meeting, means sentiment is likely to be driven primarily by economic data and investor interpretation rather than direct central bank communication.

From a technical perspective, the Nasdaq continues to show resilience. Despite the profit taking on Friday, the four-hour RSI closed in bullish territory. The daily RSI has also held in positive ground for the past five weeks, reinforcing the momentum behind the rally. This alignment of shorter-term and broader indicators suggests that the index is maintaining strong upward bias, leaving scope for another push higher.

Taken together, both technical and fundamental factors present a constructive outlook. Profit-taking episodes appear to be temporary, while rate cut expectations are providing a renewed tailwind. If sentiment around policy easing holds, the Nasdaq Composite looks positioned to challenge and possibly break above last week’s record peak in the sessions ahead.

Nasdaq stalled at 21,710 ceiling as payrolls outcome shapes rate cut outlook. Nasdaq faces repeated rejection below record highs despite early September strength.

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