Key Points:
- Nasdaq index falls significantly, hitting a low of 21,594.2 points amid tech sell-off.
- Traders are cautious ahead of crucial Nvidia results and upcoming U.S. core inflation data.
The Nasdaq took a sharp hit on Monday, extending last week’s losses as traders grew uneasy ahead of Nvidia’s earnings report and fresh U.S. inflation data. The tech-heavy index dropped from an intraday high of 22,186.25 to a low of 21,594.2, reflecting growing anxiety over stretched tech valuations and the uncertain interest rate outlook.
After closing last week down 2.5%—its worst performance in three months—the Nasdaq continues to face downward pressure as markets nervously anticipate Nvidia’s fourth-quarter results. Analysts expect the AI chipmaker to report revenues of $38.5 billion, with first-quarter guidance of around $42.5 billion. Given Nvidia’s dominance in the AI-driven tech sector, its earnings could trigger significant market volatility.
Beyond corporate earnings, inflation concerns remain front and centre. Recent data has cast doubt on market hopes for imminent Federal Reserve rate cuts. Weaker-than-expected U.S. services activity and rising inflation expectations last week raised concerns that the Fed could delay easing monetary policy.
Traders will be watching Friday’s core personal consumption expenditures (PCE) report—the Fed’s preferred inflation gauge—which is forecast to cool slightly to 2.6% from 2.8%. However, any upside surprise in inflation could further dampen rate-cut expectations, putting additional strain on tech stocks.
Technical Analysis
A look at the Nasdaq’s technical chart shows the index in a clear downward trend, breaking below key moving averages before stabilising. This decline was mirrored across Wall Street, where concerns over hotter-than-expected inflation numbers have slowed the pace of anticipated rate cuts.
Picture: Nasdaq 100 drops 1.78% to 21,676.85 after peaking at 22,186.25, as tech stocks retreat ahead of key data, as seen on the VT Markets app
Adding to the market’s uncertainty, cross-border tensions are escalating. President Donald Trump’s latest tariff threats—targeting key sectors like automobiles, semiconductors, and pharmaceuticals—could disrupt global supply chains, drive up costs, and put further pressure on tech companies that depend on international trade.
With market volatility likely to remain elevated, all eyes are on Nvidia’s earnings and Friday’s inflation data for clearer direction. Traders should be prepared for sharp market swings as traders react to these pivotal developments.
