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Is Big Tech Starting 2025 With Bullish Signals?
David Russell
January 6, 2025

The Nasdaq-100 may be confirming a breakout as the New Year begins with more strength in AI.

The tech-heavy index probed below 21,000 last week before reversing higher. That pullback included tests under its October high, December low and 50-day moving average. Successfully holding a spot like that may suggest buyers remain in control.

Microsoft (MSFT) boosted sentiment by saying that data center investment is running higher than expected. Vice Chairman and President Brad Smith noted in a blog post Friday the software giant is building “AI-enabled datacenters to train AI models and deploy AI and cloud-based applications.”

That eased worries the AI boom may be slowing. It’s also potentially positive for Nvidia (NVDA), whose chips are crucial to machine learning and AI models.

NVDA will be in the spotlight this week with CEO Jensen Huang kicking off the consumer electronics show (CES 2025) this evening. It presents to analysts tomorrow afternoon and may reveal details about new products. Executives from other companies like Delta Air Lines (DAL) and Accenture (ACN) will also appear this week and discuss the potential for expanding AI investment.

Nasdaq-100, daily chart, with select patterns and indicators.

Apple (AAPL) slid 4.8 percent last week, its biggest decline in eight months. The iPhone maker had steadily climbed in the previous six weeks. Could the pullback draw buyers to the world’s most valuable company by market cap? NVDA also jumped after making a higher weekly low, a potential sign its longer-term uptrend remains intact. AAPL and NVDA are the two largest members of the Nasdaq-100, accounting for about 18 percent of the index.

Strong Economic Data

Last week’s economic data was mostly positive. Initial jobless claims fell more than expected to their lowest level since April. Continuing claims, which measure ongoing unemployment, had their biggest drop in over a year.

Biggest Gainers in the S&P 500 Last Week
Vistra (VST) +16%
Constellation Energy (CEG) +11%
Devon Energy (DVN) +8.8%
Diamondback Energy (FANG) +8%
NRG Energy (NRG) +7.1%
Source: TradeStation Data

The Institute for Supply Management’s manufacturing index rose more than forecast to its highest level in nine months. New orders, backlogs, production and deliveries pointed to improvement following almost a year of contraction.

Energy stocks rose the most last week, partially because of surging natural-gas prices. That lifted companies like Devon Energy (DVN) and Diamondback Energy (FANG). Vistra (VST) and Constellation Energy (CEG) led a bounce in utility stocks after the Biden Administration loosened hydrogen-production rules. CEG also got a record-sized power-supply deal from the government.

Materials were the weakest sector last week as the U.S. dollar strengthened and China’s economy continued to struggle.

Brown Forman (BF.B) had the sharpest decline in the S&P 500 after the U.S. Surgeon General recommended warning labels for acholic drinks. The maker of liquors like Jack Daniels was already sliding because of tariff worries.

Tesla (TSLA) fell the most among the megacap companies after quarterly deliveries missed estimates. It shot to a new all-time high in mid-December and is now trying to hold early peaks from late 2021. TSLA is the seventh-largest member of the Nasdaq-100.

S&P 500, daily chart, with select patterns and indicators.

Charting the Market

The S&P 500 slid 0.5 percent in the holiday-shortened period between Friday, December 27, and Friday, January 3. It was the third decline in the last four weeks.

At one point, it was down 2.4 percent. Prices inched 3 points below their low on December 20 before turning higher, a potential sign that support is in place.

The bounce also occurred in the same zone where the index peaked in October and bounced in mid-November after the election. Those points may further validate the support area (shaded on the chart above).

Next, stochastics and Wilder’s Relative Strength Index (RSI) are turning up from the bottom of their ranges. Those patterns may be consistent with prices bottoming. The nine-day rate of change turned positive as well. Similar occurrences, like mid-September and late November, were followed by upside in the stock market.

The Week Ahead

This week features some important economic events that could impact interest rates. The market is also closed on Thursday in memory of former President Jimmy Carter.

Biggest Decliners in the S&P 500 Last Week
Brown-Forman (BF.B) -6.6%
Wynn Resorts (WYNN) -6%
Boeing (BA) -6%
PPG Industries (PPG) -5.1%
Workday (WDAY) -5%
Source: TradeStation Data

Federal Reserve Governor Lisa Cook speaks this morning.

ISM’s service-sector index is tomorrow morning, along with the government’s job-openings report (JOLTs). NVDA’s analyst Q&A is at 3:30 p.m. ET.

Wednesday morning brings ADP’s private-sector payrolls report and crude-oil inventories. Minutes from the last Fed meeting at 2 p.m. ET could be important after policymakers issued a relatively hawkish outlook.

There’s no trading on Thursday. However initial jobless claims are due and Walgreen Boots Alliance (WBA) reports quarterly results.

Friday morning brings non-farm payrolls, a key monthly reading of employment conditions. Consumer sentiment and Delta Air Lines (DAL) earnings are also on the schedule.

Tags: AAPL | BA | BF.B | CEG | DVN | FANG | NRG | NVDA | PPG | TSLA | VST | WDAY | WYNN

About the author

David Russell is Global Head of Market Strategy at TradeStation. Drawing on nearly two decades of experience as a financial journalist and analyst, his background includes equities, emerging markets, fixed-income and derivatives. He previously worked at Bloomberg News, CNBC and E*TRADE Financial. Russell systematically reviews countless global financial headlines and indicators in search of broad tradable trends that present opportunities repeatedly over time. Customers can expect him to keep them apprised of sector leadership, relative strength and the big stories – especially those overlooked by other commentators. He’s also a big fan of generating leverage with options to limit capital at risk.