US Tech forecast: the index may resume its decline

The US Tech index may break below the support level and enter a medium-term downtrend. The US Tech forecast for next week is negative.

US Tech forecast: key takeaways

• Recent data: US CPI for February rose by 2.4% year-on-year
• Market impact: the current data is positive for the technology sector

US Tech fundamental analysis

The CPI release, at 2.4% year-on-year, in line with the 2.4% forecast and the previous reading, is generally neutral for the market, but with a mildly favourable tone. It shows that inflation in the US is not accelerating so far, and the core index excluding food and energy also remained at 2.5%. On a monthly basis, headline CPI increased by 0.3%, while core CPI rose by 0.2%. This means investors did not receive a new reason to expect a more hawkish monetary policy based solely on this report.

For the US Tech index, this data is more supportive than restrictive. The technology segment is typically especially sensitive to changes in inflation and interest rates because its valuation depends more heavily on expectations of future earnings. When inflation is in line with the forecast and shows no further acceleration, the market gets a signal that pressure on the cost of capital is not intensifying. Therefore, for the large-cap tech sector, this is more likely to be a positive, or at least stabilising, factor.

US Tech technical analysis

For the broader US stock market, the impact of such a release appears more restrained. The report itself does not create conditions for a sharp upward revaluation, as investors had already expected these figures. In other words, the data did not provide a strong new impetus for growth, but neither did it confirm a deterioration in the inflation picture. This is typically favourable for the broader market, as it reduces the risk of a sharp revision of interest rate expectations.

The US Tech index is showing a downward bias. The nearest resistance level is located around 25,860.0, while the main support lies near 24,455.0. At the moment, prices are moving within a sideways range and testing the support level. If pressure persists, the next downside target could be 24,010.0.

The US Tech price forecast outlines the following scenarios:

• Pessimistic US Tech scenario: a breakout below the 24,455.0 support level could push the index down to 24,010.0
• Optimistic US Tech scenario: a breakout above the 25,860.0 resistance level could drive the index to 26,560.0

Summary

This news is rather favourable for the US Tech index and is not negative for the US stock market overall. It confirms inflation is stabilising, but it does not provide a strong enough improvement to trigger broad gains across all sectors. Technology companies and other rate-sensitive segments appear to be in the strongest position in this environment. The nearest downside target may be 24,010.0.

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