Nasdaq Composite rebounds as optimism grows over government funding bill

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Sholanke Dele

10.11.2025

Nasdaq Composite rebounds as optimism grows over government funding bill — Nasdaq rebounded 1.25% after last week’s 5.77%

The Nasdaq Composite Index started the new week on a positive note after suffering its sharpest weekly drop in more than seven months. The index fell 5.77% last week, losing 1,380 points to a low of 22,560 as investors reassessed valuations in AI-linked tech stocks. The selloff was driven by growing doubts about how quickly artificial intelligence investments can translate into profits, concerns over circular spending within the sector and soft labor data.

- Nasdaq rebounded 1.25% after last week’s 5.77% drop, aided by shutdown optimism.

- AI stocks and chipmakers lifted sentiment as investors rebuilt exposure to growth assets.

- Index now tests EMA resistance near 23,000 after finding support at 22,560.

At 22,560, the Nasdaq’s decline was cushioned by the 78.6% Fibonacci retracement level and the 50-day EMA, both serving as key technical support zones. The bounce from that level indicated early buying interest after a week of heavy liquidation. In Monday’s premarket session, Nasdaq futures advanced by 1.25% or roughly 315 points as optimism returned following reports that lawmakers were progressing toward ending the government shutdown that had frozen several economic data releases.

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

Market optimism was fuelled by the Senate’s plan to amend a House-passed bill that extends government funding until January 30. Traders interpreted that move as a potential stabilizing signal for risk sentiment. A smooth reopening of the government would revive economic reporting, helping the Fed assess conditions more accurately and potentially stabilize liquidity expectations across markets.

Lawmakers’ progress on shutdown bill restores investor sentiment across risk assets

Tech shares led the early rebound, reflecting renewed appetite for growth-oriented assets. Nvidia gained 3.6% in premarket trading, while Alphabet and Meta Platforms rose 2.2% and 2%, respectively. Semiconductor names also advanced, including Qualcomm and Intel, which both traded higher after last week’s heavy selling. The gains highlighted selective buying in quality AI and chip-related firms, suggesting investors were beginning to rebuild exposure to key growth drivers.

From a technical view, the index faces immediate resistance from a previously broken rising trendline that now converges with the 100 and 50 EMA on the 4-hour chart. These levels represent the first significant test for bulls attempting to confirm a short-term reversal. A breakout above this zone could indicate stronger investor confidence and long positioning ahead of a potential end to the government shutdown.

If that scenario unfolds, the Nasdaq could extend its rebound toward the 23,000 zone. However, failure to overcome this resistance area would keep the focus on 22,500 as critical support. The broader trajectory of the index this week may hinge on how quickly political progress translates into restored market confidence and whether the rebound in AI-heavy stocks sustains beyond early short covering.

We discussed how the Nasdaq Composite corrected 3.5% amid heavy sell-side pressure. The index dropped 1.8%, its largest one-day loss in three weeks.

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