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Stocks are attempting to recover after yesterday's steep losses, led by Apple as traders worried protests in China could weigh on growth and cause further supply-chain bottlenecks. The Nasdaq is recovering with futures contracts up 0.7% in light of increasing signs China is clearing the path towards reopening and continues to boost Covid-19 vaccinations of its population.

Lower US Treasury yields have helped the Nasdaq strengthen lately. In light of the Fed minutes suggesting a softer pace of rate hikes, investors are seeing renewed risk appetite. Nonetheless, inflation data such as next week's favorite inflation gauge the PCE, released on the 1st of December, will be key to confirming the slowing pace of inflation and the trajectory of the Fed cooling down its monetary tightening measures.

The Nasdaq 100 or ETF that tracks it, the QQQ, is showing encouraging price action looking at the indice from a technical analysis perspective. Traders will monitor the FOMC statement this afternoon, which could add volatility, but it will really all be about next week's PCE which could determine whether markets take a leg higher or break down lower. 

Stocks climbed from their lowest levels since June, after Treasury yields cooled down their ascent. Sentiment remains extremely bearish, only seen that negative in recent years, during the Covid market crash. A number of US macro data will be released today such as CB Consumer Confidence, New home sales, Durable goods orders, and FOMC members Bullard and Daly will speak.

US jobless claims continued to rise modestly as of July 23rd, still below pre-pandemic levels. Tomorrow's payroll report should be important. The Nasdaq has rallied 19% from its lows in mid-June, and S&P500 climbed 13%. Behind the rally, tech earnings have been stronger than feared. More importantly, the market consensus has evolved from a hard-landing with a recession to one where the Fed gradually pivots to being less aggressive as inflationary pressures soften. Data is supporting this view with oil prices declining and the Prices Paid Index revealing intense deflationary pressures. From a technical perspective, on the Nasdaq there is some resistance at 13’530, about 2% higher from here.