The Nasdaq 100: Is the Tech-Driven Bull Market Losing Momentum?

The Nasdaq 100, a bellwether for the tech sector, has long been a magnet for investors seeking growth in an innovation-driven economy. However, as Q4 2025 unfolds, a confluence of technical deterioration and macroeconomic headwinds raises critical questions about the sustainability of its recent rally. This analysis examines whether the index's bullish momentum is faltering and what lies ahead for investors.

Technical Deterioration: A Bearish Crosscurrent

The technical landscape for the Nasdaq 100 in Q4 2025 is increasingly bearish. Moving averages across all timeframes-from the 5-day to the 200-day-have issued "Strong Sell" signals, with zero buy indicators and 12 sell signals. This divergence between short-term price action and long-term trends is a classic sign of weakening momentum. Compounding this, the 14-day RSI stands at 36.413, a level traditionally classified as oversold, yet the index remains trapped in a bearish consolidation phase according to technical analysis.

Recent price action has tested critical support levels near the 24,350–24,500 zone, a pivotal area identified in technical analyses. On November 26, 2025, the Nasdaq 100 rebounded 0.7% to close at 23,025.59, avoiding a breakdown below this support cluster. While this offers temporary relief, the index remains below the 25,350 resistance level, a key threshold for confirming a trend reversal according to technical analysis.

Meanwhile, candlestick patterns suggest a fragile bullish setup: a clean H4 Fair Value Gap reversal pushed the index above 24,931, but a rejection at 24,907 could trigger a pullback to 24,608 or 24,350.

The RSI also raises red flags. A bearish divergence-where price makes higher highs while the RSI forms lower highs-has emerged, signaling potential for a correction. This technical fragility is further underscored by the index's inability to sustain a breakout above 25,350, a level that would validate renewed bullish sentiment according to technical analysis.

Macroeconomic Headwinds: A Perfect Storm

Technical indicators alone do not tell the full story. The Nasdaq 100's performance is inextricably tied to macroeconomic conditions, which are growing increasingly challenging.

1. Inflation and Fed Policy
Global inflation is projected to ease to 5.33% in 2025, but the Americas face a rise to 4.43%, driven by U.S. trade policies and supply chain strains. The Federal Reserve, despite cutting rates by 25 basis points in December 2025, remains cautious. The FOMC emphasized its dual mandate, projecting only one additional 25-basis-point cut in 2026 and maintaining the federal funds rate at 3.50%-3.75%. This tight monetary policy contrasts with traders' expectations of a December rate cut priced at 85%, which briefly buoyed markets according to market analysis.

2. Economic Contraction and Labor Market Weakness
The Atlanta Fed's GDPNow model forecasts a Q1 2025 contraction of -2.8%, signaling a potential recessionary dip. Meanwhile, labor market indicators-declining quit rates, stagnant real wages, and reduced average weekly hours-suggest upward pressure on unemployment according to economic data. These trends could dampen consumer spending and corporate earnings, particularly for tech firms reliant on discretionary spending.

3. Global Trade and Policy Uncertainty
Protectionist policies under the Trump administration have exacerbated supply chain bottlenecks, raising input costs in sectors like construction and automotive. Elevated tariffs and geopolitical tensions further cloud the outlook, with global merchandise trade growth projected at 2.4% in 2025-well below pre-pandemic levels. For the Nasdaq 100, which includes firms heavily exposed to global demand (e.g., semiconductors, cloud services), these risks are material.

A Tenuous Outlook: What Lies Ahead?

The Nasdaq 100 now stands at a crossroads. A sustained move above 25,350 could reignite bullish momentum, particularly if AI and semiconductor stocks continue to lead the charge. However, a breakdown below 24,350 would likely trigger a cascade toward 24,000, testing the resolve of long-term investors.

Macroeconomic conditions add another layer of complexity. While the Fed's December rate cut provided temporary relief, the broader policy environment remains restrictive. J.P. Morgan Research warns that ongoing trade policies could induce a "broad-based downshift in growth," with inflationary pressures shifting toward the U.S. in H2 2025.

For now, the index's fate hinges on two key factors:
1. Technical Validation: Can bulls defend the 24,350 support zone and push above 25,350?
2. Macro Tailwinds: Will a Fed pivot or stronger-than-expected economic data offset global headwinds?

Investors must remain vigilant. The Nasdaq 100's resilience has been remarkable, but the convergence of bearish technical signals and macroeconomic fragility suggests a high probability of volatility. As the saying goes, "Bull markets climb a wall of worry"-but when the wall begins to crumble, even the sturdiest climbers may falter.