And Just Like That, the NASDAQ Roars Back

April was only a couple of months ago, but it feels like a different era now. Back then, the media pundits presumed worst-case scenarios. Today, tech stocks are tapping all-time highs as traders unleash their animal spirits.

The fear and dread didn’t exist when the tech-heavy NASDAQ hovered near 20,000 in January. America had a new President (or maybe I should say, a familiar President) and was ready for a regime change, something more business-friendly and market-conducive.

Plus, the incoming President had campaigned on pro-crypto reform. Bitcoin and the NASDAQ aren’t directly correlated, but they’re both technology-dependent, risk-on asset classes.

Then, the market discovered that the President actually said what he means and means what he says. The prospect of tariffs on America’s major trade partners would take many market participants by surprise even though the President had stated multiple times that this is what he would do.

By April, paper-hands traders sold off their Apple stock, their Microsoft stock, and their NVIDIA stock. They also dumped their Tesla stock on the presumption that Elon Musk would be too busy running DOGE to attend to his electric vehicle company.

Courtesy: Holger Zschapitz

Fast-forward to late June, and we see that the NASDAQ 100 is back above 20,000 and notching new all-time highs. Believe it or not, this index has rallied 30% since hitting its recent low point on April 8.

Some folks are going to be disappointed that the NASDAQ has recovered so quickly. Maybe they don’t want the current Presidential administration to get credit for the recovery. Or, perhaps they didn’t buy the dip in April and are frustrated because they missed out on the rally.

Rest assured, there will be problems for the government to deal with and more NASDAQ pullbacks to capitalize on. For example, the U.S. government has an impending debt ceiling and might actually run out of money after August 15.

That’s according to a report from the Bipartisan Policy Center, which expects the debt ceiling deadline to fall between August 15 and October 3. If Congress doesn’t act fairly soon, there could be dire consequences for the U.S. economy.

And by the way, the national debt remains sky-high at $37 trillion. These are issues that Americans can’t afford to overlook, yet the NASDAQ 100 is floating high as if nothing could possibly go wrong in 2025.

Courtesy: @GlobalMktObserv

The NASDAQ’s comeback isn’t just a matter of market complacency, however. It’s also a function of the de-dollarization that’s been going on this year. As the U.S. dollar has rapidly lost value, this has proved to be a tailwind for tech stocks as well as for gold, silver, and platinum.

Moreover, the dollar’s descent has boosted Bitcoin in a big way. Reportedly, the U.S. dollar’s share in international reserves has plummeted by 10 percentage points over the last five years, to the lowest in over three decades. That’s bad for dollar defenders but potentially a boon for Bitcoin as more attractive currency option.

This just reinforces a point that I emphasize again and again: if you want to know what’s really happening in the financial markets, monitor the dollar closely. When the dollar’s in decline, that’s bullish for a wide array of asset types.

When all is said and done, it shouldn’t be too shocking that the NASDAQ 100 is back above 20,000. After all, U.S. tech stocks are typically measured against the U.S. dollar, which is losing its status as the reserve currency that the world can count on.