AI-related selling and chip stock declines drive Nasdaq 100 lower by almost 2%

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Nasdaq 100 slides 1.99% today

Highlights

Nasdaq 100 futures fell as chip stock weakness triggered investor concern over the sustainability of the AI-driven rally.
SpaceX's addition to the Nasdaq 100 prompted index lineup changes amid broad selling pressure across constituent stocks.
Technicals show the index trades below short-term averages near 29,105, with overbought momentum indicators and a five-day range projection of 28,607 to 29,676.

Broad selling pressure intensifies as AI rally outlook dims

On Tuesday, Nasdaq 100 futures recorded losses following declines in chip stocks, which led investors to reassess the sustainability of the AI-driven rally. Trading adjustments were also noted as SpaceX was set to commence trading as part of the index. These developments directly affected the Nasdaq 100 constituent lineup, though price action has remained under broader selling pressure.

Anton Kharitonov, expert at Traders Union, sees the sharp Nasdaq 100 decline as a warning sign. He notes that persistent weakness below the 20- and 50-day averages is reinforced by sentiment shifts after chip stocks fell and SpaceX entered the index. He believes that strong buying momentum is contradicted by neutral ADX and overbought markers. Recent volatility and broad selling suggest risk remains elevated despite a still-bullish long-term setup. "I remain cautious here, as overbought conditions and weak near-term signals could lead to further downside if support breaks."

Viktoras Karapetjanc, expert at Traders Union, maintains a constructive view despite recent losses. He highlights continued institutional interest in AI and new index constituents, noting these developments support further upside. Karapetjanc points out the longer-term bullish trend remains intact and sees the current pullback as a healthy consolidation. He expects volatility to offer new entry setups for forward-looking traders. "With buying signals still robust and bullish structure undisturbed, I see this as an opportunity to position for further growth in the Nasdaq 100."

Jainam Mehta, market strategist, observes technical mixed signals around key resistance and support. He notes volatility and neutral trend strength may set up a tactical breakout or short-term range play. Mehta suggests close attention to the $29,110 and $28,607 levels for possible directional moves. "Sideways action could soon give way to a sharp move — traders should prepare for potential breakout or reversal setups at these boundaries."

Mixed momentum signals persist as overbought warnings temper bullish trend

Nasdaq 100 trades below the 20-day ($29,599) and 50-day ($29,198) moving averages, while staying well above the 200-day ($26,119). This configuration signals ongoing short- and medium-term pressure from sellers within a broader bullish long-term trend. Nearest resistance is identified at $29,110, with support at $29,088. Momentum signals present a mixed picture. Both MACD and Awesome Oscillator reflect strong buying momentum, but the ADX remains neutral, indicating weak trend strength. RSI and Stochastic RSI inhabit buy zones, while CCI is neutral. Bull/Bear Power favors buyers, although overbought warnings persist. The index last traded at $29,105 after a daily loss of 591.977 points, with intraday volatility of 0.94%. Persistent seller pressure was observed after the open. Indicator readings show buying interest, yet overbought signals and neutral trend strength suggest that a pause or pullback is possible.

Earlier, analysts noted that persistent selling pressure in the Nasdaq 100 remained a key risk amid technical weakness and structural changes in the index’s composition. The latest developments, including renewed declines in chip stocks and shifting momentum readings, reinforce the importance of monitoring both $29,110 as immediate resistance and $28,607 as crucial support for near-term trading opportunities.

Source of Data: NDX Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

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