Nasdaq hits new highs bolstered by Tesla ahead of Fed rate cuts

Tesla boosts Nasdaq with strong performance

Last week finished with the US Tech 100 (Nasdaq 100) hitting a fresh record high, while both the US 500 (S&P 500) and the Dow Jones took a breather ahead of this week’s eagerly anticipated Federal Reserve (Fed) meeting.

The rally in the Nasdaq on Friday night was supported by Tesla, which surged 7.4% to $395.94 after Tesla Chair Robyn Denholm publicly supported Elon Musk, stating that his political activities on X (formerly Twitter) have no impact on sales or operations and that he is irreplaceable for navigating artificial intelligence (AI), robotics, and autonomy. This contributed to a weekly gain of about 12.85% as it drove away (pun intended) from the 200-day moving average at $330.

Bucking the trend, Oracle fell by 5.09% on Friday to $292.18, marking a second consecutive day of declines following Wednesday’s dramatic rally, which saw the billion-dollar company surge an eye-popping 36%.

US: FOMC interest rate decision

Date: Thursday, 18 September at 4.00am AEST

At the last Federal Open Market Committee (FOMC) meeting in July, the Fed kept interest rates on hold at 4.25% – 4.50% with two dissents in favour of a rate cut (Bowman and Waller).

Fed Chair Jerome Powell sounded hawkish, noting that a wait-and-see approach was appropriate as the labour market remained solid, and that inflation may be more persistent than expected, with uncertainties around tariffs. This saw market pricing of a 25 basis points (bp) rate cut in September fall to about 44% from 64% prior.

In late August at Jackson Hole, Fed Chair Powell pivoted dovish, noting that the risk of a labour market slowdown was now considered a more significant risk than persistent inflation. Last week’s soft monthly labour market data has reinforced the view that downside labour market risks dwarf the risks of persistent inflation.

As such, the Fed is expected to cut rates by 25 bp this week to 4.0% – 4.25% - its first rate cut in nine months. Presuming Stephen Miran's appointment to the Board is confirmed later today, he is expected to dissent and vote in favour of a 50 bp cut, with Waller and Bowman possibly joining him.

The median dot is expected to still show two 25 bp cuts this year, and the dots for 2026 are expected to show two 25 bp cuts versus one previously. Chair Powell will note the heightened downside risks to labour markets and a willingness to continue to cut rates further if these risks remain in place.

The United States (US) interest rate market is fully priced for a 25 bp rate cut this week. There is a total of 69 bp of Fed rate cuts priced between now and the end of this year, and a total of 146 bp of cuts priced between now and the end of 2026.

Fed funds rate chart

Nasdaq 100 technical analysis

Last week’s rally in the Nasdaq 100 to new record highs confirmed that the Wave IV pullback from the mid-August high of 23,969 concluded in early September at the 22,977 low. The push to new record highs also met the minimum requirement for a Wave V, within our preferred Elliott Wave framework.

The extension of the Wave V rally will depend on whether it can break above the weekly trend channel resistance, currently near 24,150ish. If it succeeds, there is potential for the Wave V to extend towards 25,000ish.

Conversely, if the Nasdaq 100 post the FOMC meeting fails to clear weekly trend channel resistance and falls below support at 23,500ish coming from the late July high of 22,959, it would be an initial indication that the Nasdaq 100 has completed a five-wave advance from the April lows, and that a corrective pullback is underway, initially towards 22,500 with scope towards 22,000.

Nasdaq 100 daily chart

S&P 500 technical analysis

Last week’s rally in the S&P 500 took it to new record highs at 6600, confirming that the Wave IV pullback from the mid-August high of 6481 concluded in early September at the 6360 low.

Notably, the rally saw it close the week above weekly trend channel resistance at 6540 – 6550ish. This indicates that there is further upside potential for the S&P 500 towards 6750, if it can maintain the break above 6540 – 6550ish after this week’s FOMC meeting.

Conversely, if the S&P 500 after the FOMC meeting finishes the week back below weekly trend channel resistance at 6550 – 6540, it would be an initial indication that the S&P 500 has completed a five-wave advance from the April lows. It would also be an initial indication that a corrective pullback is underway, initially towards 6350 with scope towards 6200.

S&P 500 daily chart

• _{Source: TradingView. The figures stated are as of 15 September 2025. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.}