Nasdaq 100 Forecast: NDX falls as oil jumps and Treasury yields rise

US futures        

Dow futures -0.54%, S&P 500 futures -0.36%  & Nasdaq futures  -0.60%

European futures

FTSE 0.32%,  DAX  0.8%

• US stocks rise as oil jumps and Treasury yields rise
• US 10-year Treasury yield rises above 5.2%
• Nvidia rises on AI safety platform
• Oil rises as Trump rejects Iran’s ceasefire proposal

U.S. Stocks Fall as Oil and Inflation Fears Rise

U.S. stocks are pointing to a weaker open on Monday after President Trump rejected an Iranian ceasefire, sending oil prices higher and fuelling inflationary concerns and pushing Treasury yields higher.

In addition to rejecting the offer from Iran, Trump said the U.S. could continue talks this week. However, optimism about a deal is fading. Trump also warned that the U.S. could resume its bombing campaign in Iran after the midterm elections.

Crude oil prices have jumped over 3%, with the rolling correlation between oil prices and Wall Street futures at its highest level since late May, suggesting that energy and equity markets are increasingly sensitive to the same macro factors, including the potential economic and inflationary impact of a prolonged conflict.

With inflationary concerns rising, Treasury yields have extended gains, with the 10-year yield rising to 5.2% on Friday.

Attention this week will be on U.S. core PCE, the Fed's preferred gauge for inflation, as well as Friday's non-farm payroll report. The main concern for markets isn't that employment conditions could suddenly weaken. It's almost the opposite.

Economic data has remained surprisingly strong despite higher rates and energy prices, with the September flash composite PMI at its strongest level in almost five years.

Typically, stronger non-farm payrolls are positive for stocks, but that is not necessarily the case when inflation is also rising sharply. Strong employment could instead strengthen the case for the Fed to keep rates higher for longer, or even hike rates again to bring inflation under control.

Corporate Movers

Nvidia is outperforming a broader sell-off in chip stocks, up 1.5% on Monday after announcing new AI safety software and a $150 billion increase in its stock buyback programme. Other chipmakers such as Marvell and AMD started the week around 2% lower.

Meta is falling 3% pre-market after a 13% gain last week following a series of announcements related to its personal AI agent, Muse. The sell-off comes as AI-related stocks broadly move lower.

Newmont Goldcorp is down 4%, tracking precious metals lower. Gold and silver have fallen to seven-week lows as the U.S. Treasury yield crosses 5.2%.

Energy stocks are rising as oil prices trade up 4%, with ConocoPhillips and Occidental Petroleum up 2%, while Chevron and ExxonMobil are up 1.5%.

Nasdaq 100 Forecast – Technical Analysis

The Nasdaq 100 broke above its falling trendline resistance, rising to a record high of 30,800 before easing back. The price is consolidating above 30,400 and trades above its 200 and 50 EMAs, keeping the outlook constructive.

Buyers will look to rise above 30,800 to bring 31,000 into focus, ahead of 32,000 as the next logical target.

On the downside, immediate support can be seen at 30,300, the July high. Below here, 29,900 comes into focus as the falling trendline support.

It would take a move below 28,900 for the outlook to turn more bearish, bringing 28,300 into focus, the June low.

FX Markets – Dollar Rises, EUR/USD Falls

The USD is rising, adding to strong gains last week. The dollar holds near a two-month high as the U.S.-Iran standoff lifts oil prices and Treasury yields, while investors look ahead to a busy week for economic data.

The market is pricing in a 70% probability that the Fed will hike rates at the October meeting.

EUR/USD is under pressure around its lowest level since July 28, ahead of testimony from ECB President Christine Lagarde. The euro lost 0.85% against the dollar last week, its third straight weekly decline, amid concerns over a widening interest-rate gap between the U.S. and Europe.

GBP/USD is rising against its major peers, despite a stronger U.S. dollar, after a series of Bank of England officials stressed higher inflationary pressures, keeping the possibility of a rate hike on the table.

These warnings come after the Bank of England left interest rates unchanged in September and a slightly more hawkish tone from Governor Andrew Bailey in a speech last week.

However, the UK labour market is deteriorating, which, combined with sluggish private-sector momentum, could limit the upside in GBP.

Oil Prices Rise as Diplomatic Hopes Fade

Oil prices are rising almost 3% on Monday after falling for the past two weeks, as developments in the Middle East remain in focus.

President Trump rejected an Iranian ceasefire over the weekend and warned that bombing could resume after the midterm elections, increasing uncertainty over when the Strait of Hormuz may reopen and keeping a geopolitical risk premium in Brent and WTI.

Physical supplies are improving, however. Kpler data showed OPEC crude supplies rising to 12.8 million barrels per day in September, the highest since the conflict began, driven by higher Saudi and UAE loadings. Saudi exports are also recovering, with shipments expected to reach 5.4 million barrels per day this month, up from 2.4 million in August.

With little sign of a breakthrough in U.S.-Iran talks, oil prices could continue to grind higher.