US Tech forecast: the index is testing resistance

The US Tech index entered a correction after the Fed’s decision to keep the policy rate unchanged and deliver a fairly hawkish comment. The US Tech forecast for next week is positive.

US Tech forecast: key takeaways

• Recent data: the US Fed’s policy rate remained at 3.75% per annum
• Market impact: the current data have a negative implication for the technology sector

US Tech fundamental analysis

Given the Fed’s refusal under Warsh to provide forward guidance, the decision to keep the rate at 3.75% can no longer be viewed as a fully neutral signal for the market. Formally, the rate matched both the forecast and the previous reading, but the key change lies not in the rate level itself, but in the regulator’s new communication model. Previously, the market could rely on Fed forecasts, assess the expected rate path, and price potential cuts or hikes into assets in advance. Now, investors will have to interpret inflation, the labour market, consumption dynamics, and bond yields more independently.

For the US Tech index, this change matters, as the technology sector shows particular sensitivity not only to the actual level of interest rates, but also to expectations regarding their future path. With the rate kept at 3.75%, the market could have interpreted the decision as moderately neutral or even slightly positive if the Fed had left clear signals about possible further policy easing. However, the refusal to provide forward guidance reduces investor confidence that a rate cut will actually occur in the foreseeable future. As a result, the risk premium in growth equities may increase.

US Tech technical analysis

For the US equity market as a whole, the refusal to provide forward guidance means a transition from a market that largely followed Fed signals to one that will depend more heavily on actual data. This may increase the importance of each inflation, employment, retail sales, and business activity report. If the data indicate slowing inflation without a material deterioration in the economy, the stock market may retain support, as investors will expect the Fed eventually to move towards rate cuts.

The US Tech index began to recover after the correction. The resistance level formed around 30,690.0 points. The nearest support stands at 28,415.0. The current trend remains upward and may become medium-term. If the upward movement continues to develop, the next target may be the 31,895.0-point area.

For the US Tech index price forecast, the following scenarios can be highlighted:

• Pessimistic US Tech forecast: if quotes break below the support level at 28,415.0, they may fall to 27,525.0
• Optimistic US Tech forecast: if quotes break above the resistance level at 30,690.0, they may rise to 31,895.0

Summary

For US Tech, the key conclusion is that keeping the rate unchanged does not represent a negative factor in itself, but the Fed’s refusal to provide forward guidance increases uncertainty around the future cost of capital. This may limit the index’s potential for rapid growth and increase volatility after macroeconomic data releases. A favourable scenario for US Tech would combine resilient economic growth, slowing inflation, and stable or declining bond yields. A negative scenario would emerge if the market starts pricing in a prolonged period of high rates. The nearest upside target may be 31,895.0.

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