NDXUSD

The Nasdaq 100 index will be on edge this week due to the high sensitivity of technology and growth stocks to interest rates. The most defining events of the week are Fed Chairman Powell's speech this evening and the delayed Non-Farm Payroll data to be released on Friday, which the market is eagerly anticipating. If Powell conveys a message of determination in the fight against inflation before or after Wednesday's CPI data and addresses the theme of "high interest rates lasting longer," it will put direct pressure on the valuations of technology stocks. This is because a high interest rate environment reduces the present value of companies' future cash flows and increases borrowing costs; this is a negative catalyst, especially for technology companies that grow through debt. A strong employment figure that exceeds expectations (52K) on Friday, along with wage increases, has the potential to reinforce these hawkish expectations, leading to a sharp wave of selling in the index. Therefore, throughout the week, downward risks on the Nasdaq weigh more heavily, and investors' cautious stance may limit the index's upward movements.