Nasdaq Composite: Worst Session Since Late 2022
As indicated by the Nasdaq Composite chart (US Tech 100 mini on FXOpen), yesterday's decline was -2.62% in a single session.
Thus, tech stocks experienced the sharpest drop since late 2022, with around 75% of companies in the Nasdaq Composite index closing in the red.
Alphabet (GOOG) shares, the parent company of Google, fell by 4.9% due to higher-than-expected AI expenses and disappointing YouTube advertising revenues.
Tesla (TSLA) shares dropped by 12% due to a 7% decline in automotive revenue, missed earnings, and delays in the Robotaxi project.
Chipmaker stocks also suffered losses.
What is the reason for the Nasdaq Composite (US Tech 100 mini on FXOpen) price decline?
According to Business Insider, renowned Wall Street investor Ed Yardeni believes that:
Major market players started exiting tech stocks on July 11, as news of low inflation motivated them to rotate and shift capital into stocks sensitive to the anticipated interest rate cuts;
The stock market is overbought and undergoing a minor correction.
Technical analysis of the Nasdaq Composite (US Tech 100 mini on FXOpen) chart provides more details:
The price has been in an uptrend in 2024 (shown in blue) but made a bearish reversal from the upper boundary in mid-July. This week, it aggressively moved down with wide bearish candles into the lower half of the channel;
The lower boundary of the channel and the support level at 18920 (in effect at the beginning of June) form a block that bulls are pinning their hopes on.
If the stock market is indeed experiencing a minor sell-off to move out of an overbought state, this support block might act as a brake and slow down the pace of the Nasdaq Composite (US Tech 100 mini on FXOpen) price decline observed this week.
Read more: https://fxopen.com/blog/en/oa-nasdaq-composite-worst-session-since-late-2022/
Text source: Forex Trading Blog
