Nasdaq Rebounds into Resistance Zone as Financial Conditions Ease

The US financial conditions have eased in recent days, and as a result, the Nasdaq index has rebounded into a resistance zone. The easing of Treasury yields, the weakening of the US dollar, and the decrease in volatility have all contributed to this upward movement.

Historically, when these factors persist, they tend to lead to stronger forward returns for the Nasdaq. Backtesting suggests that the persistence of easing financial conditions is more important than the initial shift itself.

The upcoming US non-farm payroll report on Friday may determine whether the bullish move extends. A strong jobs report could push yields and DXY higher, tightening financial conditions and potentially limiting upside for the index.