The Nasdaq 100 index dropped over 2% last Friday, reversing about two-thirds of the previous week’s gains. It has yet to break above the record high reached in December, and bears may become active if the February low is breached.
Market volatility is expected to return next week due to upcoming economic data releases, including US consumer confidence, GDP, unemployment claims, and the core PCE price index. Technical indicators across weekly, daily, and 4-hour charts indicate declining strength.
While short-covering may occur Monday, the index’s trajectory appears uncertain as it approaches key support levels.
The sharp fall in the Nasdaq 100 suggests traders are growing uneasy about whether the strong start to the year can continue. It also raises questions about whether momentum is beginning to fade. Losses of this magnitude, particularly after a solid advance in previous weeks, tend to shake confidence. If prices continue to weaken, those betting on further gains may be forced to reassess their outlook.
With a busy economic calendar ahead, shifts in sentiment could come quickly. Traders will be watching key releases to determine whether the recent pullback is just a temporary pause or the beginning of something larger. Confidence data will offer insights into how households are feeling about the economy, while GDP will provide a broader look at growth. Unemployment claims may signal any early cracks in the labour market, and the core PCE price index will be closely watched for inflation pressures. A combination of weaker growth and stubborn price increases could complicate decisions in the weeks ahead.
Technical signals are also raising concerns. On multiple time frames, momentum appears to be fading, and without fresh buying pressure, risks could tilt to the downside. If prices test the February low, sellers may become more aggressive. While temporary bounces could emerge if traders close short positions, those would not necessarily alter the broader trend if weakness persists.
For now, attention remains on how price levels hold up in the coming sessions. If support areas give way, more defensive positioning may follow.
