Haslinda Amin Weighs In on Tech Rally and EUR/USD Volatility Ahead of Fed Hopes

Markets extended gains Tuesday as investor sentiment strengthened following a wave of positive tech earnings. The NAS100 rose 2.3%, with Nvidia and Microsoft contributing over 40% of the index’s daily momentum, fueled by robust data center demand and AI-driven revenue growth. The SPX climbed 0.8% to close above 5,350, marking its third consecutive session of gains. This rally coincided with a rebound in the EURUSD pair, which settled at 1.0852, up 0.7% on the day, as traders recalibrated expectations on a potential rate cut by the Federal Reserve in March 2026. The recent strength in technology stocks underscores the sector’s ongoing dominance in equities, with the tech sector contributing 36% of the NAS100’s total market cap. Financials lagged slightly, with the KBW Bank Index down 0.2%, reflecting cautious sentiment around credit risk and tighter lending standards. Analyst commentary suggested that the rally is not solely tied to macroeconomic data but also to structural shifts in enterprise spending, particularly in AI infrastructure and cybersecurity. The interplay between equity performance and currency movements remains tight, as rising U.S. equity valuations tend to attract foreign capital, supporting the dollar. However, with the U.S. yield curve flattening and 10-year Treasury yields declining to 4.15%, the dollar’s recent gains have been tempered. This dynamic has allowed EURUSD to reclaim levels seen in early December, adding volatility to foreign exchange markets.