The rally in the US Tech index continues, with the price hitting a new all-time high ahead of upcoming US labour market data. The US Tech forecast for next week is positive.
US Tech forecast: key trading points
- Recent data: the Federal Reserve’s balance sheet totalled 6.59 trillion USD
- Market impact: the current data has a moderately negative effect on the technology sector
US Tech fundamental analysis
As of 23 October, the Federal Reserve’s balance sheet shows a decline in total assets to 6.59 trillion USD from 6.596 trillion USD the previous week – a reduction of around 6 billion USD (approximately 0.1%). This trend aligns with the ongoing quantitative tightening (QT) program. From a liquidity standpoint, it reflects a modest contraction in bank reserves and a potential increase in term premiums for US Treasury bonds. For the broader equity market, this is a neutral-to-negative factor in terms of valuation: tighter financial conditions generally raise discount rates, compress valuation multiples, and increase the required rate of return on equities.
US central bank balance sheet: https://tradingeconomics.com/united-states/central-bank-balance-sheet
The scale of the weekly change is minimal, so the immediate price effect is typically limited and overshadowed by movements in UST yields and corporate earnings reports. The ongoing government shutdown adds importance to high-frequency indicators of financial conditions. Overall, the latest Fed balance sheet data signals that quantitative tightening continues without a qualitative shift in policy.
US Tech technical analysis
For the US Tech index, the effect is slightly negative. However, the key factor remains the future trajectory of the Fed’s key rate. If continued balance sheet reduction is accompanied by rising real yields, this would increase pressure on the valuation of future cash flows and lower acceptable P/E ratios. Conversely, stable or declining yields would likely result in a neutral investor response.
US Tech technical analysis for 24 October 2025
The US Tech index has recovered from last week’s decline and may once again form an uptrend. The resistance level has formed at 25,175.0, while a new support zone has emerged near 24,200.0. The next upside target could be 25,480.0.
The following scenarios are considered for the US Tech price forecast:
- Pessimistic US Tech scenario: a breakout below the 24,200.0 support level could send the index to 23,460.0
- Optimistic US Tech scenario: a breakout above the 25,175.0 resistance level could propel the index to 25,480.0
Summary
The Fed’s balance sheet declined slightly, confirming the continuation of QT and modest tightening of financial conditions. For the US stock market, the overall impact is neutral to negative, while the US Tech index remains more sensitive due to its dependence on long-term yields and discount rates. Amid the ongoing government shutdown, uncertainty remains elevated, but the latest data alone is not a catalyst for sharp market moves. The next upside target could be 25,480.0.
Source: Roboforex