Nasdaq Composite drops below 23,500 ahead of key housing data release

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Tech-heavy Nasdaq faces holiday weakness

Highlights

Nasdaq drops below 23,500 as supply zone rejection extends bearish premarket pressure
Nasdaq Index lags behind peers as thinning volume, tech weakness stall end-of-year positioning
Pending home sales data may shape Nasdaq’s direction into the final trading days of the year

Friday’s session ended on a weak note, snapping a five-day daily win streak that had lifted the index above its 20-day EMA. Despite that daily loss, the Nasdaq still closed the week at 23,600, locking in a 1.5% weekly gain. However, the bearish rejection from the 23,700 ceiling prevented any extension of the December rally and kept the index below the high for the month.

Nasdaq Composite price chart (July - Dec 2025). Source: Tradingview

Compared to its peers, the Nasdaq lagged behind. While the S&P 500 and Dow Jones also ended Friday’s session slightly lower, they both held closer to all-time highs and maintained stronger positioning into year-end. The Nasdaq’s relative weakness reflects continued sensitivity to profit-taking in tech names and fading momentum in growth stocks as 2024 closes out.

Nasdaq index direction may hinge on housing surprise and positioning ahead of January

Volume has been thinning throughout the past week, as shown on the hourly chart. Lower liquidity during the festive season has reduced conviction behind price moves, allowing resistance zones to have a more pronounced impact on intraday direction. This also means support areas like the 23,300 level, which aligns closely with the 20-day EMA and the prior week’s low, may face tests if selling continues.

Investor focus now shifts to today’s pending home sales data. The forecast stands at 1.0%, down from the previous reading of 1.9%. If the actual figure surprises to the upside, it may provide a tailwind for broader sentiment by reflecting resilience in housing-related economic activity. A weaker reading could reinforce end-of-year concerns about macro softness, potentially weighing further on tech-heavy equities.

The Nasdaq Composite is caught between thinning participation and key technical levels as the year draws to a close. Whether it holds the 23,300 support or breaks lower may hinge on investor response to today’s economic data and their positioning ahead of next week’s full market resumption.

In recent analysis, we discussed how the Nasdaq Composite held above 23,620 despite low volume and mixed Fed expectations. AI chip cost concerns and weak momentum limited gains after the five-day rally.

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