Nasdaq 100 Forecast: Why Warsh's First Fed Meeting Has Investors Nervous

TradingKey - The Nasdaq 100 was trading at 28,957.60 on June 8, with elevated volume as smart money pulls back ahead of the June 16 to 17 FOMC meeting. That meeting represents Warsh’s first as Fed Chair, and the most important immediate macro event to watch for tech prices. Price support now sits at the 0.236 Fib level, which is currently at 28,876. The first place you see a serious decline if price falls through it is the EMA50, which stands at 28,068. The RSI at 48.20 is in neutral territory, with no bearish divergence visible at present.

The AI earnings that drove Nasdaq from 22,834 remain the same, but the macro landscape has changed. April CPI of 3.8% on the headline and 4.1% core prints has moved rate cuts further out, the Warsh Fed is unknown, and eight days of uncertainty until the FOMC press release is enough to cause investors to take profits off the table, especially as valuations are elevated at this stage.

The Macro Forces Behind the Pullback — Inflation, Dollar, and the Warsh Unknown

In the face of these pullback conditions, Nasdaq is contending with three macro forces, each working against it.

First, inflation remains sticky. April CPI of 3.8% on the headline and 4.1% core came in higher than expectations, pushing the high-for-longer narrative from Q2 through Q3. The disinflation print in CPI that markets had priced as the likely March and April scenario is no longer the case, and the June CPI print any higher will just further validate a more hawkish interpretation of the Fed.

Second, real yields. In periods where inflation is persistent and the Fed stands still, real yields are rising. The real yield is equal to the nominal yield less inflation expectation. It is a headwind for growth stocks that are valued on future earnings (discounted cash flow model), with Nasdaq AI leading names having the longest duration earnings. It stands to reason that a 25 basis point increase in real yields will have a mechanical effect on Nasdaq’s multiple. Third, Warsh is unknown.

Kevin Warsh is a new Fed Chair. Markets have few data points on what his reaction function will be. The prior Fed Chairs provided markets with years worth of signal to read. Warsh is an unknown to markets as it pertains to speed and conditions to signal easing. June 16 to 17 is the first chance for the markets to learn. Markets aren’t selling Nasdaq because they expect something hawkish to come out, they’re selling it to protect themselves, as they cannot accurately price out what’s to come. The ten-week ceasefire in US-Iran hostilities and the partial trade deal between Trump and Xi are both positive, but not enough to offset the FOMC unknown currently priced in.

Three FOMC Scenarios and What Each Means for the Nasdaq

The June 16 to 17 FOMC statement is going to break this uncertainty one of three ways. A patient, conditional pause would see Warsh holding rates, noting sticky inflation while signalling that a future easing may be on the table, assuming disinflation comes back online. This, the base case in rates strategy, would likely stabilize Nasdaq trading between 28,876 and 29,880, allowing AI earnings narrative to kick back in.

A dovish cut/cut signal in H2 2026 would reduce real rates and have growth indices run higher, setting prior extension of 30,743 as the first stop and 31,547 to 32,369 projection of the channel extension as the objective. Alternatively, a signal that Warsh holds rates through to 2026 without offering any cut signal would force real rates higher, crush Nasdaq valuation, and set the test for 28,068 EMA50 or 27,722 0.382 Fib as the first floor.

The geopolitical backdrop is relevant here to scenario probabilities. A ceasefire in Iran, for instance, removes any inflation risk from energy, a disinflationary input that would reduce the urgency on Warsh to hold higher for longer. Any evidence of further softening in the labor market, while goods inflation is sticky, is an input that allows Warsh to hold higher for longer without signalling a hawkish pivot.

Additionally, a partial trade deal in the Trump-Xi summit, which reduces supply chain inflation pressures, is an incremental reduction in inflation risk. This leaves the hawkish scenario as the least probable of the three, justifying the 28,068 level over 27,722 as the stop reference because the market does not expect deep correction, only resolution of uncertainty.

Nasdaq 100 Technical Setup — 0.236 Fib at 28,876, EMA50 at 28,068, Recovery to 30,743

In the current daily session, the Nasdaq 100 is at 28,957, attempting the Fib 0.236 of 28,876 in the rising blue channel. The 28,068 EMA50 and 25,565 EMA200 are both firm floors of long term bullishness. RSI at 48.20 is neutral and there is no hint of a bearish cross or divergence and the volume spike into this decline is typical of profit taking and not distribution. If this holds with stabilizing RSI, we set recovery at 29,880 to 30,743, the prior extension, and channel projection 31,547 to 32,369 on the full continuation.

LEVEL MAP

• 28,957 is testing 28,876 0.236 Fib
• 28,876 is 0.236 Fib, Support 1
• 28,068 is EMA50, Support 2
• 27,722 is 0.382 Fib, hawkish scenario 3
• 29,880 is Support entry trigger
• 30,743 is prior extension, neutral FOMC objective
• 31,547 to 32,369 is channel extension, dovish FOMC objective

Why Did the Nasdaq 100 Fall 4.77% on June 8?

That -4.77% drop represents macro-induced, pre-FOMC profit taking and not a shift in AI fundamentals. With April CPI at 3.8% headline and 4.1% core, we remain ensconced in the higher-for-longer camp. Warsh's FOMC meeting (June 16-17) is an unknown reaction function event and institutions are de-risking ahead. Those that have ran 30 to 100% year-to-date are driving the selling. Volume spiked to confirm institutional distribution ahead of an uncertainty event, not deteriorating fundamentals.

What Are the Three FOMC Scenarios for the Nasdaq?

Neutral: Warsh holds, acknowledges inflation, re-frames future easing as conditional, as Nasdaq stabilizes in 28,876 to 29,880 and AI earnings re-assert. Dovish: a cut or H2 cut signal compresses real yields immediately, targets 30,743 and the 31,547 to 32,369 channel projection. Hawkish: an extended hold with no cut pathway, real yields rise, tests EMA50 at 28,068 or Fib 0.382 at 27,722. Neutral is rates market base case, fully hawkish least likely given Iran ceasefire, softer labour market, and partial Trump-Xi trade resolution.

Is the Nasdaq 100 Still in a Bull Market After the 4.77% Drop?

Yes. It sits at 28,957 within the ascending channel, above EMA50 at 28,068 and 200-day at 25,565. RSI neutral at 48 with no bearish divergence. AI corporate earnings powering the rally (Nvidia, Microsoft Azure, Broadcom, Marvell, Meta) are still intact structurally. The -4.77% trading session is a valuation multiple correction ahead of an impending higher-uncertainty event, not a reversal of the secular AI spend story. The 28,068 EMA50 is the line in the sand between a healthy correction and extended reset.

Bottom Line

The Nasdaq 100 is correcting 4.77% into the June 16-17 Warsh FOMC with 0.236 Fib at 28,876 first support and 28,068 EMA50 as the floor. Three scenarios: neutral FOMC stabilizes here and rallies to 30,743; dovish FOMC to 31,547 to 32,369; hawkish FOMC tests 28,068 and possibly 27,722.

The fully hawkish scenario least probable given Iran ceasefire, partial Trump-Xi resolution, and softer labour market. AI fundamentals, including Nvidia sold-out Blackwell, $190 billion Microsoft capex, Marvell's trillion-dollar nod, are untouched. This correction is the market pricing in uncertainty it hasn't yet solved. Eight days to the FOMC statement.