Nasdaq Slides Tuesday, Tech Megacaps Weigh Heavy
The Nasdaq opened lower today and continued its decline. Tech mega-cap stocks like $AAPL and $TSLA leading the way in the tech-heavy index.
The Nasdaq opened lower today and continued its decline. Tech mega-cap stocks like $AAPL and $TSLA leading the way in the tech-heavy index.
At the time of writing the main indexes were down:
DJI -0.59%
SPX -0.80%
$NDX -1.65%
The market evaluated the latest economic data, most of which has been below forecasts. Tuesday’s ISM Services PMI printed lower than the expected 53 number at 52.6 but still signaled an expanding economy.
The tech-fueled rally which has been driven by the surge in AI technology faltered at the beginning of this week. This type of market price action can be justified as investors take a break in anticipation of the Fed chair’s testimony to Congress on Wednesday.
Apple stocks took a hit on Tuesday dropping 2.7% after reports showed that the smartphone giant had lost 24% of sales in China for the first 6 weeks of 2024. China is the company’s second-largest market after the United States.
Tesla stocks also took a big hit dropping nearly 5% after the news its European Gigafactory suffered an arson attack and was forced to stop production. Production is expected to continue at some point next week.
Another cause for pause is the upcoming NFP release on Friday. The market is looking for signs of just how quickly the first rate cut could happen. The stock market has been driven more by the upcoming pivot point than positive economic data.
From a Technical Viewpoint a Retracement May Be Warrented
Lately, strong economic data has caused the stock market to decline or become erratic in the aftermath of the data release. While weaker, but still expanding, data has proven to be a stock price charger, as it fuels the hope of a pivot point coming sooner than later.
This Friday’s NFP data is looking to add 200k jobs after last month’s 343k figure. That’s a number that’s still considered expansionary, but not booming. A surprise lower should see the stock market rally.
Whereas I would expect the market to continue south if the surprise is much higher than expected. The $SPX touched an ATH on Monday before ending the day slightly lower. While the $NDX hit its ATH on Friday.
From a technical standpoint, a correction in the trend could happen. The RSI on the chart reached the 70 level for the $SPX and has since decreased below over the past 2 days. The $NDX didn’t even break the 70 level with its last push higher before reverting lower.
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