European equities and US stock futures traded in relatively narrow ranges on Friday morning as investors continued to weigh geopolitical developments in the Middle East against the persistent strength of the global technology rally. European indices such as the DAX have underperformed the likes of the Nasdaq 100, which continues to break records on a daily basis. Indeed, Wall Street closed at fresh record highs on Thursday, with gains led once again by large-cap technology stocks. Asian markets followed suit overnight, as benchmarks in both Japan and South Korea advanced to historic peaks.
With oil prices hitting fresh lows on the week today, markets appear increasingly comfortable with the assumption that some form of diplomatic resolution between Washington and Tehran will eventually emerge, even if the timing and scope remain highly uncertain. For stock market investors in particular, attention remains firmly centred on the momentum behind the artificial intelligence investment cycle and the broader resilience of global technology earnings. Rising energy and petrochemical costs, which would ordinarily raise concerns about inflationary pressure across consumer sectors, have so far failed to materially dent equity sentiment.
Investors continue to prioritise AI narrative
The big message from markets remains clear: investors continue to view the global technology cycle as sufficiently powerful to offset many of the macroeconomic and geopolitical risks currently hanging over the outlook. For now, investors are also evidently not too concerned about sky-high tech valuations. Will this come back to haunt investors remains to be seen.
The technology sector once again provided the backbone for market optimism this week. Some of the big names driving the latest gains were Dell, Samsung and LG.
In after-hours trading, shares in Dell Technologies jumped after the company lifted its full-year guidance and delivered stronger-than-expected first-quarter earnings and revenues. The results added further fuel to the narrative that corporate spending tied to AI infrastructure remains exceptionally robust.
In Asia, South Korean technology names also outperformed sharply. Samsung Electronics and LG Electronics helped propel the Kospi index to new highs after both companies announced significant product developments.
Samsung said it had begun distributing samples of its latest high-bandwidth memory chips to customers worldwide, underlining expectations for sustained demand linked to AI data centres and advanced computing applications. LG Electronics, meanwhile, unveiled a new range of automotive technologies developed in partnership with Google, part of a broader push into software-enabled mobility solutions.
Ceasefire developments leave traders cautious
Meanwhile, reports yesterday suggested that US and Iranian negotiators had reached a provisional 60-day framework agreement aimed at extending the ceasefire and reopening discussions surrounding Iran’s nuclear programme. Axios, citing US officials and regional sources, said the arrangement was awaiting final approval from President Donald Trump. However, optimism has been tempered slightly after reports that Iranian armed forces had launched missiles towards unspecified targets.
Nasdaq 100 technical analysis and levels to watch
The Nasdaq 100 is now up more than 30% after bottoming at the end of March. It is set to end higher the week higher for the second consecutive week, barring a major drop today. In fact, out of the past 8 weeks, it has only finished lower once – and that was just a meagre 0.5% drop a couple of weeks ago. The trend is therefore very strong, and you don’t need indicators such as the RSI to tell you that the market is quite overbought. The trend will end only when the market decides, and when lower lows and lower highs are made. No signs of that yet. Therefore, dip buying remains the name of the game. Initial support is now seen at 30,000, with 29,675 being the next important level down. The 21-day exponential average comes in at around the 29,000 level. The most recent low is at 28,570, formed on May 19th.
-- Written by Fawad Razaqzada, Market Analyst
Follow Fawad on Twitter @Trader_F_R
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