[B]Date: 16th October 2026.[/B]
[B]NASDAQ Rebounds 2% as Fed Comments Boost Sentiment, DAX Outperforms.[/B]
The stock market ends its four-day decline after regaining some confidence from the Federal Reserve Chair’s comments. At the IMF’s annual meeting, Kevin Warsh was clearly attempting not to create market volatility or further weaken sentiment. All indices, except the Nikkei 225, rose during the US session.
Currently, the best-performing indices are European stocks, particularly the EURO STOXX 50 and German DAX. The worst-performing indices of the day so far are the Nikkei 225 and NASDAQ.
Despite the rebound, investors should be aware that certain risks remain for the stock market. These include high energy prices, inflation, interest rates, and global debt risk.
The NASDAQ Attempts to Rebound Despite Continued Risks & Concerns
The NASDAQ rose 2.00% during the US session after declining to its lowest level since 18 September. The asset found support from a slightly dovish and confident Fed Chair, as well as positive retail sales figures.
The retail sales figure rose to 0.8%, slightly lower than the previous month, but higher than market expectations. In the previous days, the market faced mounting concerns over a possible economic slowdown. For this reason, the higher retail sales figure was particularly important in calming concerns. In addition, retail sales reading higher for two consecutive months boosts expectations of a positive earnings season.
During the IMF’s annual meeting, Kevin Warsh and Christine Lagarde sounded relatively confident and dovish while speaking to journalists. Federal Reserve Chair Kevin Warsh made no comments regarding higher rates or his outlook for the US economy. Investors took the lack of comments on inflation as a dovish tilt, boosting the stock market.
Nevertheless, concerns and risks continue to mount for the stock market. In addition to higher consumer inflation, producer inflation again rose above expectations. Markets were expecting the Producer Price Index to rise 0.6% and core producer inflation to rise 0.3%. The final figures were more than double, with the Producer Price Index rising 1.3%.
Furthermore, Warsh warned that artificial intelligence may be driving demand in the near term, and said that, as a central banker, he’s taking the new technology seriously but also ‘soberly, responsibly’. Technology companies will start to announce their earnings reports next week.
NASDAQ stocks due to announce their earnings report next week:
Netflix - After Market Close Tuesday - 22nd Most Influential Stock - down 20% in 2026
Intuitive Surgical - After Market Close Tuesday - 38th Most Influential Stock - down 23% in 2026
Meta - After Market Close Wednesday - 8th Most Influential Stock - up 13% in 2026
Tesla - After Market Close Wednesday - 10th Most Influential Stock - down 17% in 2026
Lam Research - After Market Close Wednesday - 19th Most Influential Stock - up 49% in 2026
HFM - NASDAQ 15-Minute Chart
In terms of technical analysis, the price of the index is obtaining bullish sentiment on smaller time frames, but medium-term timeframes paint a different picture. On the 1-hour chart, the price continues to move downwards, and the upward price movement marginally forms a retracement.
Monitoring the 5-minute timeframe, if the price falls below $29,879.90, the short-term buy indications will fade and the chart will become more bearish. On larger time frames, this will apply when the price falls back below $29,647.85. If the price is to decline, the main support levels can be seen at $29,433.75 and $29,000.00.
The outcome of the above earnings reports will significantly influence whether the index will rise or fall.
German DAX - Weaker AI Demand & Defense Spending Boosts the DAX
Due to concerns regarding AI and also US inflation, investors are turning to the German DAX. The German DAX has only risen by 1.40% in 2026 and is trading at a more competitive entry price. The German DAX is known to be a more stable option when investors wish to reduce exposure to the US and AI.
Concerns about excessive AI valuations and financing costs have pressured technology companies. The DAX has relatively limited exposure to major AI-related stocks, making it less vulnerable to the selloff than some technology-heavy indices. However, next week’s earnings data will impact this. If tech earnings impress, the NASDAQ could rise again while the DAX may trade sideways.
German 10-year government bond yields have declined to around 3.35%, easing some pressure on equity valuations and borrowing costs. However, falling yields also reflect concerns about economic growth. Nonetheless, for now, strong performance in German stocks supports the DAX. Rheinmetall rose 3.87% on Thursday, helping support the DAX. Defence stocks have benefited from continued investor interest amid geopolitical tensions.
HFM - DAX 30-Minute Chart
If the DAX is to continue rising, key levels that investors will be monitoring are the 25,655.00 and 26,630.00.
Key Takeaways:
The NASDAQ rebounds 2% as Fed comments and stronger-than-expected US retail sales restore investor confidence.
The German DAX outperforms as investors shift towards European stocks amid AI valuation concerns.
High energy prices, inflation, interest rates, and global debt continue to pose risks to stock markets.
Upcoming earnings from Meta, Tesla, Netflix, and other major companies could influence the NASDAQ’s next direction.
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[B]Please note that times displayed based on local time zone and are from time of writing this report.[/B]
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[B]Michalis Efthymiou
HFMarkets[/B]
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