Nasdaq 100 Analysis: Tech Stocks Under Pressure as Fed Fears Return

If the Nasdaq is just going through a period of long liquidation then, with the trend up, investors will be looking for new opportunities to buy, but at more favorable prices.

A true top is going to take a few days to form. The first leg down is usually followed by a test of the record high. If sellers come in on that move then that will be a sign of more downside pressure to follow.

What to Watch

The 10-Year U.S. Treasury yield and oil are the two drivers that are not resolved going into the rest of the week. Yields at 4.63% are already pressuring growth stocks and if inflation data or Fed commentary pushes them higher from here the selling in semiconductors and tech is not done. Oil holding elevated keeps the inflation story alive and gives the Fed no reason to soften its tone. Those two factors together are what broke the market’s confidence on Friday and nothing Monday changed that picture.

The Nasdaq Composite broke the weak side of 26223.18 and that level is now resistance. The next support cluster sits at 25810.13, 25599.49 and 25453.07. The minor bottom at 25739.22 is the level that matters most. Losing it breaks the pattern of higher tops and higher bottoms and that changes the conversation about whether this is a dip or something that needs more time to work through.

More Information in our Economic Calendar.