Nvidia⁢ Earnings Fuel ⁤Nasdaq 100, Bond Yields Loom

‍ ⁣ Updated May 29, 2025

The nasdaq 100 experienced a surge overnight, propelled by Nvidia’s remarkable earnings report and a⁤ U.S. court decision that deemed most of ⁢former President Trump’s China tariffs unlawful. This combination initially painted a bullish picture, with reduced trade tensions and a ⁤tech giant⁢ exceeding expectations.

Though, a potential challenge to this upward trend is emerging in the form of⁢ rising bond yields. The U.S. 30-year yield is nearing the 5% mark, a level ⁣that has historically triggered risk ⁢aversion. Simultaneously,⁢ Japan’s government bond yields are approaching ⁣3%, potentially prompting ⁤a shift away ‍from riskier ⁣assets.

Nvidia’s strong performance continues to substantially influence market sentiment. Shares of the‍ company⁣ jumped 6.5% in after-hours trading following a positive revenue forecast, effectively overshadowing concerns about potentially weaker demand from China. ‍Plans to increase production of its new Blackwell chips further boosted optimism within the artificial ⁢intelligence sector. This enthusiasm lifted the Nasdaq ⁣100 and other major⁤ index futures,highlighting the considerable influence of Big Tech on overall market sentiment.

The court ruling on tariffs also provided a degree of relief, as a reduction in trade tensions could theoretically bolster global growth and, consequently, corporate earnings. Though, the bond market presents a more cautious outlook. Investors are increasingly wary ⁣of rising debt levels⁣ and government spending,leading them to ⁤hedge their bets by selling off Treasuries⁢ and the dollar,while turning to gold and foreign currencies.

Japan’s ultra-long government bonds are also facing ⁣renewed pressure.Despite a brief period of support following the Ministry of Finance’s ‍plans to shift issuance toward shorter maturities, longer-dated Japanese bonds are now experiencing some of the weakest demand in years. The Bank of Japan (BOJ), the largest holder of Japanese Government bonds (JGBs), has been gradually reducing its balance sheet since late 2023. Without the BOJ’s support,recent ‍auctions for 20- and 30-year bonds have been underwhelming,pushing yields higher.

The ‍BOJ faces a delicate balancing act: managing⁤ bond yields ⁢ without destabilizing markets. As it considers a review of its bond-buying program in June, the outcome could have global repercussions. Higher Japanese yields‍ could draw capital away from the U.S., potentially ⁣unwinding carry trades.

From a technical⁣ analysis viewpoint, the Nasdaq 100 futures chart recently broke above the 21,500‍ level, a bullish signal. The key question is ⁤whether this breakout will hold.A ⁢drop back below this level could trigger a pullback, with support levels at 21,220 and ⁣20,727. On the upside, the next potential ‍hurdle is the psychologically crucial ⁢22,000 level, followed by the all-time high at 22,425. The relative Strength Index (RSI) is approaching overbought levels, which may encourage some profit-taking.

the trend remains bullish, ⁢and dip-buying strategies have been effective.However, with yields ‍rising,⁤ investors should be cautious of a potential failure‍ of⁣ these strategies. At that point, counter-trend trading strategies might be more appropriate.

What’s next

Investors should⁢ closely monitor bond yields and the Bank of Japan’s upcoming policy review⁤ for potential shifts in market dynamics. Continued strength in ⁤Nvidia and the tech sector could sustain the Nasdaq 100’s upward momentum, but rising yields and global economic uncertainties could present challenges.