Nasdaq 100 Gains Support From Chip Stocks as Fed Split and Gulf Risk Keep Markets on Edge

What to Know

• Semiconductor stocks are providing the clearest support for the Nasdaq 100 in pre-market trading.
• The S&P 500 is little changed, while the Dow is trading in the red as broader risk appetite remains uneven.
• U.S. strikes on Iranian military targets earlier this week pushed oil higher on concerns about supply through the Strait of Hormuz.
• Crude later gave back that move after President Trump said he had contacted Iran about a deal.
• A day earlier, President Trump said he was done negotiating after another round of attacks, underscoring how quickly Gulf-related headlines are reversing.
• Wells Fargo Investment Institute’s Mason Mendez said assumptions of a swift return to normalized Persian Gulf exports are being challenged.
• Mendez also said low global reserves mean further escalation would reinforce a higher oil risk premium even after talks resume.
• Mendez said strong equity earnings momentum and ongoing AI strength could continue to drive the S&P 500 toward a year-end target range of 7,800 to 8,000 if the Gulf situation does not spiral.
• The latest FOMC minutes showed a unanimous vote to hold rates at 3.5% to 3.75%, but the discussion revealed a divided committee.
• Some Fed officials are leaning hawkish if inflation stays firm, while others prefer to wait for more evidence.
• Next week’s CPI data is widely viewed as the key print that could help break the policy tie.
• The Dow futures pivot sits at 52,674, with 53,656 in view on strength and 51,229 marking the 50-day moving average below.

Semiconductor Strength Keeps the Nasdaq 100 in Front

Semiconductor stocks are setting the tone for the Nasdaq 100 as pre-market trading points to a market still willing to reward areas tied to artificial intelligence and earnings momentum. While the broader index picture is mixed, chips remain the one group with a clear direction, giving technology-heavy benchmarks a relative advantage over the Dow and the more balanced S&P 500.

The move does not mean traders are embracing broad risk without hesitation. Instead, the early action suggests a narrower market, with capital concentrating in areas where investors still see durable earnings support. AI-linked demand continues to be treated as a structural driver by many market participants, and that theme is helping offset some of the caution created by geopolitical risk and a Federal Reserve that is not sending a single, clean policy message.

For the Nasdaq 100, the key technical area is its 50-day moving average at 25,989. A hold above that level would keep buyers engaged and may open the way toward the retracement zone near 26,346. If that support fails, traders may become less willing to chase the semiconductor-led move, especially if next week’s CPI data strengthens the case for a more restrictive Fed stance.

Dow Lags as Traders Watch a Critical Pivot

The Dow is weaker in pre-market trade, reflecting a more cautious tone outside the chip complex. The September E-mini Dow Jones Industrial Average is centered on trader reaction to the minor pivot at 52,674. That level is acting as the immediate dividing line between renewed buying interest and a deeper test of support.

A sustained move above 52,674 would indicate that buyers are returning. If that move generates enough upside momentum, technical traders may look for a near-term test of the all-time high at 53,656. That would represent a meaningful recovery in sentiment for a benchmark that is currently trailing the Nasdaq 100.

A sustained move below 52,674 would signal the presence of sellers. If yesterday’s low at 52,343 is taken out, downside pressure would likely be viewed as building. That could trigger a further break into the short-term retracement zone from 51,882 to 51,463. That zone is the last support area before the 50-day moving average at 51,229.

S&P 500 Stalls as Gulf Headlines Whipsaw Risk Appetite

The S&P 500 is barely moving as traders attempt to price a rapidly shifting geopolitical backdrop. U.S. strikes on Iranian military targets earlier this week sent oil higher as the market weighed potential disruptions tied to the Strait of Hormuz. The move then faded after President Trump said he had contacted Iran about a deal, despite having said a day earlier that he was done negotiating following another round of attacks.

This rapid reversal in messaging has made it difficult for traders to position confidently around Gulf headlines. The underlying risk to oil supply remains real, but the market response has been volatile because diplomatic signals and military developments are changing within hours. In that environment, short-term moves in equities may continue to be headline-driven, while longer-term investors focus on earnings momentum and AI-related growth.

Mason Mendez, global real assets analyst at Wells Fargo Investment Institute, said any assumption of a swift return to normalized Persian Gulf exports is being challenged. He also noted that low global reserves mean further escalation would reinforce a higher risk premium in oil even after talks resume. That framing keeps energy risk embedded in the equity outlook, even if crude prices give back sharp headline-driven gains.

At the same time, Mendez said renewed geopolitical risks could fuel near-term risk-off sentiment, but strong equity earnings momentum and ongoing AI strengths would likely continue to drive the S&P 500 Index toward a year-end target range of 7,800 to 8,000. That outlook is conditional on the Gulf situation not spiraling into a more severe disruption.

Fed Minutes Show Unity on the Vote, Not the Outlook

The latest FOMC minutes added another layer of uncertainty. The vote to hold rates at 3.5% to 3.75% was unanimous, but the discussion was not. That distinction matters because it shows a committee that is aligned on the current decision but divided on the path ahead.

Hawkish policymakers want to hike if prices remain hot, while more dovish officials prefer to wait. This split makes next week’s CPI release central to the market’s near-term direction. If inflation data comes in firm, traders may increase expectations that the Fed will maintain a restrictive stance or consider additional tightening. If the data points to easing price pressure, the market may lean more heavily into the idea that patience will prevail.

Jeffrey Roach, chief economist at LPL Financial, said the minutes suggest the committee is working through a wide range of scenarios and will not commit to a specific path until incoming data provides necessary clarity. For traders, that means forward guidance is limited, and price action may remain highly sensitive to each major inflation and activity release.

Technical Levels Define the Near-Term Market Map

The S&P 500 held its 50-day moving average at 7,496, keeping a key support level intact. To regain stronger upside momentum, the index needs to clear 7,540. A move through that area would point toward a test of the swing top at 7,602. Until that happens, the benchmark may continue to trade cautiously as investors balance earnings resilience against inflation and geopolitical risk.

The Nasdaq 100 is testing its 50-day moving average at 25,989. A successful hold would support the case for a run toward the retracement zone near 26,346, especially if semiconductor strength continues to lead. However, the narrow nature of the rally makes follow-through important. If chip momentum fades, the index may struggle to carry broader technology sentiment on its own.

The Dow remains the clearest tactical setup, with the 52,674 pivot guiding short-term direction. Above that level, the all-time high at 53,656 is in play. Below it, sellers may press toward the 50-day moving average at 51,229, with the 51,882 to 51,463 retracement zone serving as an important intermediate test.

What Traders Are Watching Next

Markets are heading into the next phase with three major variables in focus: semiconductor leadership, Gulf risk and CPI. Chip stocks are helping the Nasdaq 100 outperform, but the broader market is less decisive. Gulf headlines are moving too quickly for many traders to treat them as stable signals, yet the potential impact on oil supply keeps a risk premium alive.

The Fed is also genuinely data-dependent because the committee itself is divided. That makes next week’s CPI print unusually important. A strong inflation reading could revive hawkish expectations, while a softer reading could support the argument for patience. Until then, market participants may keep leaning on technical levels and sector leadership to define risk.

For now, the market has survived the latest wave of geopolitical repricing. The Nasdaq 100 remains supported by chips, the S&P 500 is holding key support, and the Dow is hovering around a decisive pivot. The next major move will likely depend on whether oil-risk headlines escalate, whether semiconductor buying broadens, and whether CPI gives the Fed a clearer policy direction.

Frequently Asked Questions (FAQs)

Why is the Nasdaq 100 outperforming in pre-market trading?

The Nasdaq 100 is benefiting from strength in semiconductor stocks, which are the clearest leadership group in the market. Ongoing AI-related optimism and earnings momentum are helping support the technology-heavy index.

Why is the Dow under pressure?

The Dow is lagging because broader risk appetite is uneven and buyers have not yet clearly reclaimed the key 52,674 pivot in September E-mini Dow Jones Industrial Average futures.

What level matters most for Dow futures?

The immediate pivot is 52,674. A sustained move above it would favor buyers and bring 53,656 into focus, while a move below it could expose support from 51,882 to 51,463 and then the 50-day moving average at 51,229.

How are Iran headlines affecting markets?

Iran-related headlines are creating volatility because signals around conflict and negotiation have reversed quickly. The market is trying to price the risk of oil-supply disruption while also reacting to shifting diplomatic comments.

Why does the Strait of Hormuz matter for oil markets?

The Strait of Hormuz is a critical energy transit route, so any perceived risk to flows through the region can raise supply concerns and add a risk premium to crude prices.

What did the Fed minutes show?

The FOMC vote to hold rates at 3.5% to 3.75% was unanimous, but the discussion showed policymakers are divided. Some officials are focused on the risk of persistent inflation, while others prefer to wait for more data.

Why is next week’s CPI report important?

Next week’s CPI data could help clarify whether inflation remains hot enough to support a hawkish Fed stance or whether policymakers have room to remain patient.

What are the key S&P 500 levels to watch?

The S&P 500 held its 50-day moving average at 7,496 and needs to clear 7,540 to build momentum toward the swing top at 7,602.

What is the Nasdaq 100 technical setup?

The Nasdaq 100 is testing its 50-day moving average at 25,989. If that level holds, technical traders may look for a move toward the retracement zone near 26,346.

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