US Tech rises as expectations of a Federal Reserve rate hike decline

The US Tech index maintains its upward momentum, supported by declining expectations of a Federal Reserve rate hike. The price currently stands at 31,016.

US Tech forecast: key takeaways

• The yield on 30-year US Treasuries reached 5.618%, the highest level since 2000
• The US services PMI stood at 58.8

US Tech fundamental analysis

The published services PMI data indicates that the US economy continues to expand at a strong pace. The actual reading came in at 58.8 points versus the forecast of 58.7 points and the same reading in the previous period. The index remains well above the 50-point threshold that separates expansion in economic activity from contraction. This points to resilient demand for services, sustained business activity, and favourable conditions for revenue growth among US companies. At the same time, the reading exceeded the forecast by only 0.1 point, which is insignificant, so the release is likely to have only a limited independent impact on the stock market.

Yesterday, the US Treasury placed 30-year Treasury bonds worth a total of 22 billion USD. The auction yield reached 5.618%, the highest level since August 2000. For comparison, the yield at the previous auction was 5.308%. The substantial increase in long-term government bond yields therefore indicates higher borrowing costs for the US government and reflects investors' increased return requirements for long-dated debt instruments.

For the US Tech, the key factor will be not so much the small upside surprise in the PMI reading itself as the bond market's reaction and changes in expectations regarding future Federal Reserve decisions. If government bond yields remain stable and demand stays resilient, the technology index could receive additional support. However, if inflation concerns intensify and yields rise, the positive effect of improving economic indicators could be neutralised.

US Tech technical analysis

The US Tech index is undergoing a correction following a surge, with the broader trend remaining bullish. The resistance level has formed at 31,400, while the support level is located at 30,100. If quotes fall below 30,800, a short-term sideways trend may develop. A breakout above the resistance level would then confirm the continuation of the upward trend, with the upside target at 32,400.

At the same time, an alternative scenario remains possible. A breakout below the 30,100 support level would signal a trend reversal. In this case, quotes could drop towards 28,885.

US Tech trading scenario for today

Trading scenario (Buy Stop)

A consolidation above the 30,835 resistance level would confirm the bullish US Tech scenario and indicate strengthening upward momentum towards the 32,365 target.

• Current price: 31,016
• Entry level: 31,500
• Stop loss: 31,300
• Take profit: 32,400
• Risk-to-reward ratio: more than 1:4.5

The trade idea is valid until 8:00 AM on 16 October 2026 (server time, UTC+3).

Risk factors

The main risks for the US stock market and the US Tech index are linked to rising yields on long-term US Treasury bonds, stronger inflation expectations, and the possibility that Federal Reserve interest rates remain high. Higher government borrowing costs could increase financing costs for businesses, reduce investment activity, and put downward pressure on equity valuations, particularly in the technology sector.

Summary

Overall, the services PMI release has a moderately positive fundamental impact on the US stock market and the US Tech index, confirming resilient business activity, domestic demand, and corporate earnings prospects. The most favourable conditions are forming for technology companies with strong financial performance.

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