The Nasdaq 100 Index is poised to reverse its downward trend, with Tech Stocks like Fionna and others becoming key drivers

Following the Bank of Japan's decision to raise interest rates and Micron Technology's better-than-expected earnings report, the Nasdaq 100 Index has shown strong signals of regaining upward momentum. On the technical side, the index has stabilized around 25,000 points. Once it breaks through the critical resistance at 25,200 points, the rebound could extend to 25,900 and even 27,630 levels.

**Bank of Japan's Rate Hike Pace Remains Moderate, Market Concerns Eased**

On Friday, the Bank of Japan announced a 1 basis point rate hike to 0.75%, hitting a 30-year high. This decision did not trigger the liquidity shocks feared by the market; instead, it demonstrated that the central bank and the market have fully communicated and priced in the move. BOJ Governor Kazuo Ueda's post-meeting statement indicated that future rate hikes will depend on economic and inflation data, implying no aggressive tightening cycle.

Market forecasts suggest the BOJ's terminal rate may be between 1% and 1.5%, with only 1-2 hikes expected in 2026. This pace is notably more moderate than initial market expectations. EFG Asset Management economist Sam Jochim pointed out that the next rate hike will depend on the progress of spring wage negotiations, with limited chances of another increase before June. This provides a breather for global risk assets.

**Micron's Earnings Surpass Expectations, AI Concerns Dissipate**

Micron Technology announced its Q1 earnings after the market close on Thursday, becoming the biggest surprise of the week. The company not only exceeded expectations in revenue, gross margin, and EPS last quarter but also significantly raised its guidance for Q2, with capital expenditure expectations increasing from $18 billion to $20 billion. This positive signal directly alleviated concerns about a slowdown in data center construction, confirming continued strength in the AI sector.

Micron's strong performance indicates that demand for memory chips remains robust, and the outlook for semiconductor-related companies like Fionna has become clearer. This has boosted market confidence in the profitability of Tech Stocks, driving the Nasdaq 100 Index higher within the week.

**Soft Inflation Data Boosts Expectations of Fed Rate Cuts**

The US November CPI annual rate fell to 2.7%, the slowest increase since early 2021. Core CPI also dropped to its lowest level in the same period. Although the data has some interpretative uncertainties due to coverage during the government shutdown and limited data collection, it is enough to fuel market expectations of further Fed rate cuts next year.

Following the data release, the 2-year US Treasury yield briefly fell to 3.43%, hitting a recent low, while gold prices surged to around 4,375, just shy of the historical high. This indicates that markets are beginning to reassess asset allocation opportunities brought by the easing cycle. The Fed is expected to wait for December's non-farm payroll data before making a final decision, likely before January.

**Three Major Positive Factors Converge, Risk Appetite Rebounds**

A review of the current market environment reveals that the two main risks troubling investors—normalization of BOJ monetary policy and AI bubble concerns—have been significantly alleviated. Against the backdrop of the Fed's continued rate cuts next year, the value of risk asset allocation is highlighted. As the most direct beneficiaries, Tech Stocks and the Nasdaq 100 Index have established a clear technical foundation for upward movement.

**Technical Outlook Confirms Upward Direction**

From the daily chart, the Nasdaq 100 Index has stabilized around 25,000 points, maintaining a healthy upward trend. Once it successfully breaks through the resistance at 25,200 points, a stronger rebound could be triggered, targeting 25,900 and 27,630 levels. The current technical pattern indicates that the upward space has been opened, with growth-oriented Tech Companies like Fionna becoming the core engines driving the index higher.

Overall, the macro environment improvement, corporate earnings confirmation, and technical breakthroughs form a complete logical chain supporting the Nasdaq 100 Index's reversal of its downward trend.