The Nasdaq isn’t exactly sprinting into the week, but it’s holding its ground. The Composite edged up a modest 0.3% to 17,808.66 on Monday, while E-mini Nasdaq-100 futures settled at 19,831.75, a steady performance ahead of a crucial week. Two heavyweight events are set to dictate market sentiment: the Federal Reserve’s latest monetary policy update and Nvidia’s much-hyped GTC conference.
Despite nagging concerns over interest rates and an AI sector that’s arguably overcooked, the Nasdaq has clawed its way back from a 10% correction, suggesting that tech bulls aren’t ready to roll over just yet. The real question is whether this resilience holds, or if this week’s catalysts tip the balance.
The Fed: Powell Holds the Mic, Markets Hold Their Breath
Rate expectations are firmly in “wait-and-see” mode. The Fed’s March 18-19 meeting is widely expected to leave interest rates unchanged, but let’s be honest, nobody really cares about the decision itself. The real market-moving moment will be Jerome Powell’s commentary.
So far, the data has been sending mixed signals. A tepid 0.2% rise in retail sales and slumping New York factory activity suggest some economic softening. If Powell hints at a policy pivot, either acknowledging this slowdown or even suggesting rate cuts later in the year, expect the Nasdaq to celebrate.
On the flip side, if he doubles down on ‘higher for longer,’ tech stocks will feel the squeeze. Growth valuations are still stretched, and with U.S. Treasury yields holding firm above 4%, with the 10-year at 4.31%, the market has little tolerance for further rate uncertainty. A hawkish Powell could be the excuse traders need to start trimming risk.
Nvidia’s GTC Conference: AI’s Big Test
Nvidia’s annual GTC conference isn’t just another product showcase, it’s the centrepiece of the AI trade. With CEO Jensen Huang set to unveil the latest in AI and accelerated computing, Wall Street will be parsing every word, every spec sheet, and every vague promise about the Blackwell Ultra GB300 chips.
The stakes are high. If Nvidia delivers true next-gen AI processing power, it could extend the sector’s rally, justifying some of the astronomical valuations across AI-linked stocks. But here’s the risk: if the announcement feels underwhelming, too incremental, too iterative, expect a harsh market reaction.
The AI trade is crowded, and expectations are sky-high. If investors sense the hype is running ahead of reality, we could see profit-taking across the sector. in other words, this event could either fuel another leg higher or mark the moment the market starts questioning just how much optimism is already priced in.
Tesla vs. Intel: A Tale of Two Market Reactions
Tesla (TSLA) isn’t having the best time. Shares slid 4.8% to $238.01, hit by reports of slowing demand in China and growing competition from domestic EV makers. The bigger issue is Tesla’s pricing strategy. Slashing prices to defend market share is squeezing margins, and Wall Street doesn’t love that equation.
But this isn’t just a Tesla problem. If price cuts spread across the EV sector, profit margins industry-wide could be in for a prolonged squeeze. Investors have been willing to accept low-margin growth for years, but that narrative starts to break down if competition forces endless price wars. Watch for how rivals respond. If other automakers start matching Tesla’s cuts, the entire EV sector could see a valuation reset.
Meanwhile, Intel (INTC) surged 6.8% on renewed speculation that incoming CEO Lip-Bu Tan might overhaul its semiconductor strategy, steering the company deeper into AI-driven solutions. But is this just another false dawn for Intel?
For years, Intel has been playing catch-up, losing ground to both Nvidia in AI chips and TSMC in manufacturing. The market is cheering the idea of an AI pivot, but execution is everything. If Intel can’t ramp up high-performance AI chip production quickly enough, the window of opportunity could close before it even gets started. The enthusiasm is understandable, but scepticism is warranted.
Geopolitics: The Unpredictable Wildcard
Beyond the usual market catalysts, geopolitics is adding an extra layer of uncertainty. Donald Trump and Vladimir Putin are reportedly set to discuss a potential Ukraine ceasefire, a development that could have far-reaching implications for global markets.
If talks gain traction, we could see lower energy prices, cooling inflation and easing pressure on central banks to keep rates high. If negotiations stall or tensions escalate, expect renewed volatility across commodities, defence stocks, and broader risk assets.
With the U.S. election now settled, markets are shifting focus to the new administration’s policy direction. Key areas to watch include U.S.-China relations, potential tech sector regulation, and fiscal policy shifts that could shape risk sentiment in the months ahead.
The Ukraine conflict remains the biggest geopolitical wildcard. A credible ceasefire agreement would reduce global uncertainty and ease supply-side pressures, particularly in energy and commodities. But if hostilities persist, expect inflationary risks to linger, keeping central banks in a tough spot. Markets will be closely watching for any diplomatic breakthroughs or further tensions that could reshape global sentiment.
Beyond the Ukraine conflict, trade tensions are another key geopolitical risk. With Trump’s renewed focus on tariffs, particularly targeting European wine and spirits, global trade volatility could resurface.
For a deeper look at Trump’s latest tariff threats and their potential impact on markets, check out our full analysis here.
Nasdaq Outlook: Strength or a False Sense of Security?
The Nasdaq has proven remarkably sturdy in the face of uncertainty, but this week is a real test. Powell’s remarks, Nvidia’s AI showcase, and any geopolitical twists will set the tone for the market’s next move.
If Nvidia delivers a knockout presentation and the Fed keeps the door open for rate cuts, tech stocks could push higher. But if AI fatigue sets in or Powell leans too hawkish, expect renewed volatility, especially in the more speculative corners of the market.
Either way, traders should buckle up, because whatever happens next, it won’t be boring.
