Nasdaq recovered on Friday; I am now watching whether this rise can carry into Fed week despite rate and energy pressure. A long-term uptrend continuing does not mean the environment is equally favourable for new buying in the short term.

Persistently expensive oil makes this distinction more important. As energy costs feed back into inflation, technology shares will respond not only to the Fed's decision but also to the path it maps for subsequent meetings.

Key takeaways

  • When assessing the recovery in chip stocks, distinguish holding an existing position from taking new risk. A fund staying above its support does not provide sufficient reason to assume that the resistance above will also be cleared; the conditions for a new purchase need to be assessed separately.
  • Even if the rate decision is unchanged, companies' borrowing costs may remain high. Looking only at share prices after the Fed would therefore be incomplete; bond prices joining the rise would be a stronger sign that financing pressure has eased.
  • If oil falls, energy companies and technology shares may move in opposite directions. A drop that lowers producers' revenue expectations can still benefit a wider group by easing other companies' costs.

What happened?

  • Market commentator Tunç Şatıroğlu (@tuncsatiroglu) believes Nasdaq's long-term uptrend is intact, but sees downside risk toward the end of September. His view on the chip ETF SMH ($SMH) follows the same framework: an existing position can be held, but this is not the right point for a new purchase. When assessing the September outlook, we should look at whether supports hold instead of treating the date by itself as a reason to sell.
  • In the U.S. CPI data for August released by the Bureau of Labor Statistics on September 11, the monthly increase was 0.4% and the annual increase was 3.4%. The core measure excluding food and energy rose 0.3% month on month and 2.4% year on year. Gasoline's 3.9% monthly increase accounted for more than one-third of the overall monthly rise; energy costs are already feeding through to consumer prices.
  • Bloomberg Television's September 12 edition of This Weekend reported that Saudi Arabia's Ministry of Energy had closed the East-West Oil Pipeline as a precaution after the attacks. Saudi Arabia's September 12 statement said that the drones used in the attack had been launched from Iraq. The pipeline carries oil to the Red Sea without passing through the Strait of Hormuz. Disruption on an alternative route could therefore also constrain supply; a fall in prices after reports of talks is not, by itself, proof that shipments have returned to normal.

What changed since yesterday?

  • U.S. stock markets were closed over the weekend, so Friday's closes were unchanged. The new difference is Şatıroğlu's SMH assessment: the near support is now $557 and resistance $579, replacing the previous $563 support and $580 resistance. The lower boundary has shifted down, widening the risk range to watch at Monday's open.

Market levels

U.S. stocks and technology

  • SPY ($SPY), which tracks the S&P 500, finished Friday at $764.29. $760 is important support; holding above it would preserve the recovery. $770 is the next resistance. Confidence in the latest rise would weaken if the price fell back below the first threshold.
  • The latest close for QQQ ($QQQ), which tracks the Nasdaq 100, was $714.88. $712 is the first support below and $720 the confirmation threshold above. A move between these two boundaries before the Fed is not enough to establish a strong direction.
  • SMH closed at $568.53, between the new commentary's $557 support and $579 resistance. If price reaches that resistance zone, whether buyers continue will matter; if the lower boundary is lost, $540 becomes support in a broader downside scenario.
  • IGV ($IGV), the ETF that tracks software companies, looks weaker than chips at $101.52. The last session's low of $101.13 is support and its high of $102.78 is a nearby resistance candidate; returning to the earlier $106 threshold would require a more pronounced recovery. Until this gap closes, it is too early to say that the technology rise has broadened.

Rates, oil and precious metals

  • Brent fell 2.81% on Friday to close at $104.61. $100 is psychological support and the previous close at $107.63 is a nearby resistance candidate. Staying above $100 means that energy costs remain high for companies and consumers despite the daily fall.
  • TLT ($TLT), which tracks long-term U.S. Treasuries, closed at $80.87. The nearby low of $80.67 is a support candidate; Friday's high of $81.48 can be watched as first resistance. A move above and hold of that upper boundary would strengthen the recovery in bond prices, while a decline would put rate pressure back in focus.
  • GLD ($GLD), which tracks gold, stayed below $401.15 at $398.77; the nearby support below is about $395.45. SLV, which tracks silver, was at $58.12, with $57.38 support and roughly $58.73 as first resistance. Reclaiming the upper thresholds in both funds would be a stronger continuation signal than Friday's rise.

Red flags

  • If stocks rise after the Fed statement while bonds fall, borrowing costs are not helping in the same direction even if investors become more optimistic about company profits. The divergence matters especially for companies whose earnings depend heavily on the future.
  • If disruption on oil transport routes lasts, the effect will not be limited to the crude price. Transport and insurance costs may also rise; producers must either absorb them in profit or pass them to customers. That second step will determine how long inflation pressure lasts.

Calendar

  • September 15-16: the Fed rate meeting (FOMC). Alongside the decision, the meeting's updated economic projections and assessment of inflation and the future rate path will be watched.

My analysis

This week I will first watch whether prices hold support, then whether the rise spreads across sectors. Strength in chips matters, but I do not assess every technology company with the same expectation when software is lagging. Keeping a long-term growth view while waiting for better conditions for a new position can be consistent; the price at which a new purchase is made matters as much as the investment horizon.

For a more positive assessment, I would want to see bond prices recover, oil pressure ease and stock gains hold beyond the first reaction. If only one of these occurs, I will separately weigh what remains weak. If supports are lost, I will not use the long-term story to overlook short-term risk; what would change my view is not the arrival of an expected date but a simultaneous deterioration in price and financing conditions.

Sources

This is not investment advice; it is a research and monitoring note.