Dear traders, dear stock market friends.
An eventful week lies behind us: the Nasdaq 100 closed at 24,817.95 points last Friday, after some wild swings over the course of the trading week. Turbulence at US regional banks, tensions in the trade dispute between the US and China and the ongoing US government shutdown initially caused uncertainty before there were signs of easing towards the end of the week.
Regional banks under pressure - market reacts nervously
On October 16, the stock market experienced déjà vu: several regional banks hit the headlines due to loan defaults, extraordinary write-downs and legal disputes. Zions Bancorporation and Western Alliance were under particular pressure, while turmoil surrounding subprime auto and auto supplier loans spread to larger banks. The regional bank ETF KRE had its weakest trading day in months.
Although regional banks are not a direct index component for the Nasdaq 100, they are a driver of sentiment. When banks signal balance sheet stress, this usually results in tighter credit conditions and dampens the willingness to generously finance cyclical growth scenarios.
More than two years ago, the collapse of Silicon Valley Bank caused uncertainty in the banking sector and also led to brief nervousness. The stock market initially reacted nervously on Thursday and Friday. The "fear barometer" VIX rose to around 29 points.
New all-time high on a weekly closing price basis in the Nasdaq 100
However, the situation calmed down considerably over the course of the day on Friday and the stock markets had a relatively friendly start to the weekend.
With a weekly closing price of 24,817.95 points, the Nasdaq 100 Index even closed at a new all-time high on a weekly closing price basis on Friday. The decisive price zones in the short term are on the downside at 24,200 points in the area of the daily EMA 50 and on the upside at 25,150 points in the area of the all-time high.
Powell signals further interest rate cuts
On October 14, Jerome Powell, Chairman of the US Federal Reserve, gave a highly acclaimed speech at the 67th Annual Meeting of the National Association for Business Economics (NABE) in Philadelphia. In his speech, Powell focused on the role of the Fed's balance sheet, the monetary policy framework of „ample reserves“ and the challenges of balancing inflation and employment. He emphasized that economic activity in the US is currently somewhat stronger than expected, but that the downside risks for the labour market are increasing at the same time. The market interprets this as a clear preference for further interest rate cuts. The base scenario is 25 basis points in both October and December.
Powell's words were an important signal for the markets: the prospect of a looser monetary policy is boosting growth-oriented sectors in particular, such as technology, whose valuations are particularly sensitive to changes in interest rates.
Reporting season starts with high expectations
Another topic that the market will focus on in the coming weeks is the reporting season for the third quarter, which has just started. The forward P/E ratio of the stock market is currently well above the five- and ten-year average, which means that the bar is set high. If Corporate America is once again able to beat earnings estimates, this should give the market a fresh tailwind. Otherwise, disappointing quarterly figures would quickly open up scope for profit-taking.
The start has been solid so far. The rate of positive earnings surprises is above the long-term average, even if the extent of the beats is somewhat lower than in previous quarters.
For the Nasdaq 100, some of the heavyweights will come into focus in the coming weeks:
- Tesla will kick things off this week on Wednesday, October 22. Expectations are high. Investors are hoping for new details on the Robotaxi plans as well as progress on the cheaper standard models of the Model Y and 3. The decisive factor will be whether the management can convince on production, margins and timelines.
- Apple will follow on October 30. The service business remains a reliable pillar, while iPhone demand and margin management are seen as potential share price catalysts. The share is already trading close to the consensus price target. Additional impetus will therefore require convincing guidance.
- As the world's most valuable listed company and a key player in the AI sector, Nvidia's figures will naturally also be an important sentiment indicator. However, a little patience is still required here: the chip manufacturer publishes its quarterly results on November 19. After a phase of increased volatility, the focus will be on the question of whether Nvidia can maintain the momentum in the AI business and how demand in less AI-driven segments will develop.
- Netflix presents its quarterly figures on Tuesday, October 21. The decisive factor will be whether the ad-financed subscription model and the first live sports rights will boost new customer numbers and revenue as hoped.
- Microsoft, Alphabet and Meta will follow next week on Wednesday, October 29
The bottom line is that the current reporting season will be a stress test for the high valuations. If the major technology stocks surprise positively again, this would be an important signal for a possible continuation of the trend.
AI remains a growth driver for tech stocks
Artificial intelligence is and remains the most important growth driver for technology stocks at the moment. There are new headlines almost every day: OpenAI recently demonstrated once again with „Sora 2“ how impressively text-to-video now works and, together with Broadcom, is developing its own special chips that work faster and more cheaply than standard GPUs. Companies from all sectors are desperately looking for AI specialists. This is a clear sign that AI solutions are now being widely implemented and bringing real productivity gains.
The heavyweights in the Nasdaq 100 in particular are benefiting from this: Microsoft, Alphabet, Meta and Nvidia cover the entire value chain, from specialty chips to cloud infrastructure and finished applications.
The starting point for a continuation of the bull market in the medium term and an outperformance of technology shares is therefore very good.
Author: Tobias Schmid
Date: 20.10.2025
