Nasdaq 100 falls nearly 2% as rotation out of AI and semiconductor leaders triggers broad selling

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Nasdaq 100 slides 1.74% today

Highlights

The Nasdaq 100 underperformed peers as investors exited AI and semiconductor stocks following weak post-earnings reactions and sector volatility.
Technical selling accelerated as major chip shares and related ETFs broke below critical support levels, cooling broader risk appetite.
The index trades below key moving averages with momentum indicators signaling near-term weakness; expected five-day range is 27,689 to 28,966 points, with a 56% chance of further downside.

Investor rotation intensifies selloff as chip sector volatility spreads to ETFs

The Nasdaq 100 index recorded a notable decline, underperforming other major US equity benchmarks as investors rotated away from AI and semiconductor leaders. Pronounced weakness in chip stocks, including TSMC and Arm Holdings, followed earnings announcements and reports of increased spending, adding to sector volatility. The selloff in these shares pushed related exchange-traded funds below key technical thresholds, which impacted the broader index. Futures tracking the Nasdaq 100 also retreated, reflecting caution amid ongoing inflation concerns and shifting market sentiment.

Anton Kharitonov, expert at Traders Union, sees the Nasdaq 100 under heavy technical and sentiment-driven pressure. He notes the rotation out of AI and semiconductors is a clear warning sign, with sellers controlling short- and medium-term direction as prices stay under key moving averages. According to Kharitonov, mixed momentum signals and oversold indicators do little to inspire near-term confidence because volatility and negative sentiment can trigger further downside. He warns that the floor at 28,239 is vulnerable, especially if sector volatility continues. "The current structure suggests sellers are in command, and any rebound is likely to face quick resistance unless underlying confidence returns," Kharitonov says.

Viktoras Karapetjanc, expert at Traders Union, believes the recent dip offers strategic opportunity for forward-looking investors. He highlights that, despite short-term turbulence, the long-term bullish structure remains intact with the index well above the 200-day moving average. Karapetjanc points out that solid support levels and heightened sector spending could fuel the next upward impulse once near-term sentiment stabilizes. He is confident that market volatility creates multiple setups for renewed growth. "With bullish alignment still present, I expect the index to attract strong buyers if consolidation continues near current levels," Karapetjanc says.

Short-term bearish momentum prevails as mixed signals and mid-range trading emerge

Nasdaq 100 is trading below both the 20-day ($29,589) and 50-day ($29,537) moving averages, but remains well above the 200-day ($26,316), signaling pressure from sellers in the short and medium term with longer-term bullish alignment still intact. Immediate levels to watch are $28,700 as the near-term ceiling and $28,239 as the near-term floor. Distant resistance levels like the Ichimoku Kijun ($29,419) and the moving averages confirm the longer-term trend context. Momentum signals are mixed: both the MACD and Average Directional Index (ADX) indicate neutral sentiment, while the Relative Strength Index (RSI) at 45.5 generates a sell forecast. Stochastic RSI, Commodity Channel Index (CCI), and Bull/Bear Power (BBP) show the index in oversold territory, with BBP at -165.18 signaling sellers have clear intraday momentum dominance. Price action has settled mid-range between $28,239 and $28,700. Intraday volatility stands at 1.63%, and sellers have maintained pressure following a pronounced downside gap at the open.

Earlier, analysts noted that the Nasdaq 100 faced ongoing short- and medium-term selling pressure despite maintaining a broadly bullish long-term trend. Recent developments deepen this trend, and traders should closely monitor the potential for further volatility if chip sector weakness persists, with $28,239 serving as a critical support level.

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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