Nasdaq 100 Forecast: NDX extends its rebound as easing Middle East tensions lift risk appetite

US futures                                          

Dow futures 0.4%, S&P futures 0.5%  & Nasdaq futures 0.9%

In Europe                                                                        

FTSE -0.35% & DAX 0.56%

• U.S stocks extend recovery from Friday’s selloff
• Trump says a deal with Iran is near (again), lifting sentiment
• Chip stocks extend recovery
• Oil falls 2% on Middle East hopes

Middle East tensions ease, Chip stocks rebound

U.S. futures are rising, extending their recovery from Friday's sharp sell-off as easing tensions in the Middle East and a rebound in chip stocks help improve risk sentiment.

Investor confidence has improved after Iran and Israel said they had halted attacks on each other, while President Trump once again suggested that a deal between the U.S. and Iran could be announced within days. Oil prices are easing, helping to calm inflation concerns ahead of tomorrow's key U.S. CPI report.

U.S. CPI is expected to show inflation rose to 4.2% year-on-year in May, up from 3.8% previously. The data come after a stronger-than-expected non-farm payroll report on Friday. A combination of resilient growth and rising inflation would support the view that the Federal Reserve could keep interest rates higher for longer or potentially raise rates later this year.

For equities, the inflation data could prove pivotal. A hotter-than-expected reading may put renewed pressure on rate-sensitive technology stocks, while a softer number could help extend the current rebound.

Attention is also turning to the IPO market. SpaceX is expected to test investor appetite for high-growth technology companies when it debuts on Friday at a valuation of around $1.75 trillion.

Separately, OpenAI has confidentially filed for a U.S. IPO, joining Anthropic in seeking to tap public markets. The concentration of large AI-related listings could provide another test of investor demand and market liquidity in the months ahead.

Corporate movers

Alibaba is in focus after the Pentagon added several Chinese companies, including Alibaba, Baidu and BYD, to a list of entities it believes have supported China's military development. Alibaba is down around 1% pre-market, while Baidu is trading modestly higher.

Chip stocks continue to recover, with the VanEck Semiconductor ETF rising 1.8%. Shares in Micron Technology are up 5%. The rebound follows last week's sell-off in AI and semiconductor stocks after Broadcom's disappointing outlook renewed concerns that valuations had become stretched following the sector's powerful rally.

Nasdaq forecast – technical analysis

The Nasdaq 100 is extending its recovery from support at 28,730. The index continues to trade above its 50-day and 200-day moving averages, keeping the broader bullish trend intact.

Buyers will look to extend the recovery above 29,600. A move above this level could bring the record high at 30,750 back into focus.

On the downside, sellers would need to break below 28,730 to create a lower low and expose the 50-day SMA at 27,700. Below here, attention turns to 26,200, the 2025 high.

FX markets – USD falls, EUR/USD rises

The U.S. dollar is easing back from a two-month high as improving sentiment surrounding the Middle East offsets expectations that the Federal Reserve could keep interest rates elevated.

EUR/USD is rising towards 1.1550, supported by expectations that the ECB will raise rates by 25 basis points this week. With eurozone inflation running at 3.2% and growth slowing, investors will be watching closely for clues on how policymakers intend to balance inflation risks against a weakening economy.

GBP/USD is extending its recovery above 1.3350 as the weaker U.S. dollar supports the pair. However, concerns surrounding UK growth and political uncertainty could continue to limit gains, even as markets still expect the Bank of England to raise rates before year-end.

Oil falls as ceasefire hopes improve sentiment

Oil prices are down around 2% on Tuesday after Iran and Israel halted attacks on each other and President Trump said a proposal for a potential agreement with Iran could be presented within days.

These developments have raised hopes that a broader agreement could eventually be reached, allowing the Strait of Hormuz to reopen and easing concerns over supply disruptions.

Meanwhile, data from China showed crude oil imports fell 29% year-on-year to their lowest level in eight years as refiners increasingly relied on existing inventories rather than new imports.

Even so, the broader supply picture remains tight. Global inventories continue to decline, reducing the market's buffer against future supply shocks and leaving oil prices highly sensitive to geopolitical developments.