Market Sentiment Sours Post Private Sector Data Release
The Nasdaq 100 saw a notable drop on Thursday, shedding 1.6%, with investors treading carefully ahead of Federal Reserve Chair Jerome Powell’s eagerly awaited address at the Jackson Hole Symposium.
Market sentiment turned bearish following the revelation of stronger-than-expected growth in private sector activity for August, leading to a decline in hopes for a sizable rate cut by the Fed in September.
As expectations shifted dramatically, traders opted to lock in profits after a significant 13% rally in the Nasdaq 100 since early August.
Semiconductor and Tech Giants Take a Beating
Semiconductor stocks, in particular, suffered losses, dragging down the iShares Semiconductor ETF to its worst performance since early August.
Of the 100 components in the Nasdaq 100, a staggering 80 ended the day in negative territory, signaling widespread pessimism in the market.
Underperforming stocks included Moderna Inc., Intel Corp., and MongoDB Inc., all experiencing substantial declines.
Magnificent 7 Tech Giants Weigh Down the Index
Top tech giants, including NVIDIA Corporation, Microsoft Corporation, Tesla Inc., Amazon.com, Inc., and Broadcom Inc., were significant drags on the Nasdaq 100’s performance due to negative returns.
Market dynamics were accentuated by their collective influence, underscoring the overall decline in the tech sector.
Technical Analysis: Support Levels Under Scrutiny
From a technical standpoint, the Nasdaq 100 concluded the session perched precariously on its crucial support level as dictated by its 50-day moving average.
As Friday’s market action unfolds, all eyes are on whether this support level will hold, potentially triggering a market rebound. Any breach below this key threshold could pave the way for a descent towards the 100-day moving average around the 18,839 mark.
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Image created using artificial intelligence via Midjourney.
