S&P 500 and NASDAQ 100 Forecast | US Indices Consolidate as AI and Fed Outlooks Clash

What to Know

• US stock indices are consolidating amid uncertainty around AI sector momentum.
• Federal Reserve rate-cut expectations remain a key driver for market sentiment.
• NASDAQ 100 shows resilience near the 25,000 level despite AI-related concerns.
• S&P 500 finds support near 6,800, backed by the 50-day moving average.
• Historically, December tends to provide a supportive backdrop for equities.

Over the last several sessions, we’ve seen the US indices struggle a bit, at least when it comes to the idea of finding some type of clear direction. Recently, there have been a lot of questions about the artificial intelligence sector, which, of course, is a massive part of the gains for the entirety of 2025. If artificial intelligence starts to fall off as far as favorability is concerned, this could cause some issues. Artificial intelligence has probably been one of the saving graces of the stock market this year, so if that narrative starts to fall apart, that’s a bad sign.

When you look at the last several weeks, it becomes apparent that a lot of people are concerned when it comes to central banks, and of course, what the Federal Reserve specifically will be doing for interest rate decisions going forward, and while they did cut rates again recently, the reality is that the trajectory of rate cuts and the frequency will be what is on the minds of most traders. As we stepped toward the end of the year, indices may slow down, but they historically have a little bit of a bid to them in December.

For what it is worth, the United States is anticipated to have a fairly robust economy in 2026, even though we may have a little bit of a “wobble” at the moment. Leading indicators still suggest that a recession is not in the cards.

NASDAQ 100

The NASDAQ 100 fell initially during the trading session on Tuesday, only to turn around and show signs of life again. By doing so, it shows that there is a certain amount of resiliency in this market, and it’s probably worth noting that the 25,000 level is an area that has attracted a lot of attention and continues to have some importance attached to it. However, there have been recent comments coming out of Oracle that they are concerned about the AI outlook in the short term. This, of course, has been bearish, but quite frankly, this is a market that is in a bullish trend, and when looked at through the prism of a longer-term trader, is simply working off some of the excess froth. It remains bullish overall from a longer-term stance.

S&P 500

The S&P 500 is driven by a lot of the same stocks that the NASDAQ 100 is these days; it looks like the NASDAQ 100. We see the S&P 500 follow a large, round, psychologically significant figure for support. In this case, it’s the 6800 level, which is also backed up by the 50-day EMA. While not necessarily looking like it is going to launch into the stratosphere, the S&P 500 does look like it’s got the ability to turn things around and perhaps test the high yet again. On a break above the highs from last week, the S&P 500 may go looking to the 7000 level. This obviously would attract a lot of headlines, and of course, perhaps kick off a bit more in the way of “FOMO trading.”

 

For more daily forecasts and expert analysis on major US indices, including the NASDAQ 100,  and S&P 500, visit our Indices Forecasts section and stay ahead of market trends.