The tech-heavy index drops today as the US government plans further export restrictions of AI chips to China, according to Reuters . It is also pressured by today's economic releases, which showed consumer strength and keep pressure for more monetary tightening. Retail sales rose 0.7% in September and the closely watched control group jumped 0.6%.
The technical outlook is a bit mixed, as markets digest competing factors and an uncertain monetary environment. The higher-for-longer narrative, the Middle East conflict and Sino-US tech trade wars pose headwinds. They can create renewed pressure towards the 200Days EMA (at around 14,200) although strong catalyst would be needed for a test.
On the other hand, NAS100 shows resilience and as long as it holds the EMA200 (black line) the road to new 2023 highs (15,946) remains open, although it does not yet seem ready to achieve that.
NAS100 has found support from a recent dovish shift in the rhetoric of some Fed voters, who diverged from the higher-for-longer message of the last policy decision. Mr Harker believes that policymakers "can hold rates where they are" . Ms Logan noted that there "may be less need to raise the fed funds rate"  due to the elevated long-term bond yields and Mr Kashkari alluded to that, saying "it's certainly possible that higher long-term yields may do some of the work for us in terms of bringing inflation back down". 
Focus now shifts to Chair Powell, who is scheduled to speak at the Economic Club of New York on Thursday, just before the communication blackout kicks in. Markets will monitor his remarks to see if he will validate the recent softer rhetoric of some officials or maintain the hawkish bias.
His comments can determine the trajectory of the Index and so can the upcoming quarterly results of Tesla and Netflix, whose stock is at a tough juncture ahead of Wednesday's report. The EV king has already reported a drop in Q3 deliveries, despite a series of price cuts. Its profitability, the AI push and the timeline of the elusive Cybertruck will be some of the focal points. Netflix will be closely watched for the progress on its strategic initiatives, which had a positive effect on revenues and subscriber figures in Q2 and any news around pricing and tiers.
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.
Retrieved 17 Oct 2023 https://www.dallasfed.org/news/speeches/logan/2023/lkl231009
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