US Tech forecast: the index is correcting after reaching a new all-time high

The US Tech index hit a new all-time high and is highly likely to continue its upward trajectory. The US Tech forecast for next week is positive.

US Tech forecast: key takeaways

• Recent data: US services PMI came in at 51.3 in March
• Market impact: the impact on the technology sector is mixed

US Tech fundamental analysis

The release of a stronger-than-expected US services PMI is a moderately positive signal for the US Tech index, but the impact will be mixed. On the one hand, the rise in the services PMI to 51.3, compared to the forecast of 50.5 and the previous 49.8, indicates that the service sector has returned to expansion. This suggests the largest part of the US economy is showing resilience, reducing fears of a sharp slowdown. This is important for the technology index, as a solid macroeconomic backdrop supports expectations for demand in digital services, cloud solutions, software, advertising, and corporate IT spending.

At the same time, there is a secondary reaction for the US Tech. Strong macroeconomic data could push Treasury yields higher and prompt markets to reassess the future path of interest rates. If investors interpret the PMI improvement as a factor reducing the odds of near-term monetary easing, this can limit the upside for technology stocks.

US Tech technical analysis

For the US stock market overall, this data appears rather constructive. The service sector plays a central role in the US economy, so a move back above 50 is typically seen as a sign of stabilising business activity. This improves overall sentiment, reduces the likelihood of a sharp economic slowdown, and supports broader risk appetite. In this environment, investors may be more willing to buy stocks linked to domestic demand.

The US Tech index is undergoing a minor correction, but the main trend remains upward. The resistance level has formed around 27,020.0, with the nearest support level located at 26,435.0. Given the distance between the current support and resistance levels, there is a possibility of another new all-time high. Otherwise, a wide sideways range may form. If the upward move continues, the next target could be the 27,750.0 area.

The US Tech price forecast outlines the following scenarios:

• Pessimistic US Tech scenario: a breakout below the 26,435.0 support level could push the index to 25,370.0
• Optimistic US Tech scenario: a breakout above the 27,020.0 resistance level could propel the index to 27,750.0

Summary

Overall, this release can be assessed as moderately positive for the US stock market and cautiously positive for the US Tech index. For the broad market, this primarily confirms the resilience of the US economy. For the technology index, the effect is more complex: a strong economy supports revenue and demand expectations, but it can also increase concerns about rates staying high. The next upside target could be 27,750.0.

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