- Tech stocks rally on AI deals and easing trade tensions.
- Nvidia leads the chipmaker charge with massive Middle East expansion.
- Momentum remains strong, but overbought signals suggest a breather could come soon.
After a red-hot start to the week, US tech stocks are pausing — not falling, just catching their breath. Index futures barely moved overnight, and Europe seems to be on hold too. With no big bearish catalyst in sight, the market mood is cautiously optimistic. The big macro driver? A thaw in US-China trade tensions. With tariff rollbacks on both sides and negotiations showing real progress, investors are getting more comfortable. What’s more, Tuesday’s softer-than-expected US inflation print added fuel to the fire — calming nerves that Trump’s trade tariffs would trigger a fresh inflation wave. So, for now, dip buyers are in control, and the tech sector, especially chipmakers, is the main beneficiary. Nvidia (NASDAQ:NVDA) popped another 1.7% in early trade after Monday’s 5.6% surge.
AI Boom Meets Middle Eastern Money
Tech stocks, especially in the chip space, got another leg up thanks to fresh AI investment out of the Gulf. The Nvidia stock stole the show with a blockbuster deal to build a mega AI data centre in partnership with Saudi-based Humain. This isn’t your average project — we’re talking 18,000 Grace Blackwell GB300 superchips in phase one alone, with full deployment of hundreds of thousands of GPUs over five years. All connected via Nvidia’s InfiniBand.
This move doesn’t just highlight Nvidia’s dominance — it marks the Middle East’s growing role in shaping the AI race. AMD (NASDAQ:AMD) rode the wave too, helped by news of an $80 billion tech consortium channeling funds across the US and Saudi Arabia. AI investment is going global, and American chipmakers are cashing in.
Pair that with reduced tariffs on Chinese imports, and it’s clear the sector is enjoying a double dose of good news.
Nasdaq 100 Technical Outlook: Still Bullish, With Strong Momentum
From a charting point of view, the Nasdaq 100 has come a long way since its April lows, with a nearly 30% rally. That’s pushed the daily RSI deep into overbought territory. It’s not a sell signal yet, but it’s a warning: don’t be shocked if momentum slows or we see a healthy pullback.
Nasdaq 100 futures are reflecting this overextended move as well, trading near recent highs and suggesting that traders are pricing in high expectations — but also increasing the risk of short-term volatility.
Support-wise, keep an eye on the 20,210–20,340 zone. This range was major resistance back in March, then a ceiling earlier this month — until the bulls smashed through after the trade truce headlines. It now lines up with the 200-day average, offering a potential bounce zone if the index dips.
For now, it’s more likely we keep grinding higher, especially if institutional money (which had pulled back for 15 months) finally steps back in. COT data suggests short interest is easing, and longs have stabilised — not exactly a rush in, but a shift in tone nonetheless.
Immediate support: Monday’s high at 20,945.
On the resistance side, not much is left. The 21,325 level is interesting — it was the last major floor before the big correction. Above that, we’re looking at 22,000 as a psychological marker, then the all-time high of 22,245.
Bottom line
Momentum is with the bulls, and tech stocks continue to benefit from a mix of AI hype, improving trade dynamics, and cooling inflation. It’s not time to chase highs blindly, but buying into strength on dips — especially around key support — still makes sense. Until a fresh bearish catalyst shows up, the uptrend remains the path of least resistance.
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Disclaimer: This article is written for informational purposes only; it does not constitute a solicitation, offer, advice, counsel or recommendation to invest as such it is not intended to incentivize the purchase of assets in any way. I would like to remind you that any type of asset, is evaluated from multiple perspectives and is highly risky and therefore, any investment decision and the associated risk remains with the investor.