Nasdaq posts highest bearish volume on price dip wiping out early CPI gains
Nasdaq Composite Index recovered slightly to close near $19,610
The Nasdaq Composite Index came under pressure on Wednesday despite softer-than-expected U.S. inflation data that initially lifted market sentiment.
The Consumer Price Index for May rose just 0.1% on a monthly basis, slightly below the 0.2% forecast, helping to ease concerns about inflationary pressures being stoked by Trump’s trade tariffs. This initially gave equities a lift, and the Nasdaq rose by 0.4% or 81 points from its opening price at $19,600 to an intraday high at $19,800. That move briefly challenged the upper boundary of a tightening rising wedge pattern.
- Nasdaq gave up all intraday gains despite softer US inflation data
- Rejection at $19,800 on highest daily volume signals institutional selling
- Technical pressure builds near wedge support at $19,440 and $19,550
However, the upside move was short-lived. Sellers quickly regained control, pushing the index sharply down by 1.3% (250 points) to a low of $19,550. This move brought the index back to the bottom of the wedge structure.
NASDAQ stock price dynamics (Nov 2024 - June 2025). Source: TradingView
Although the Nasdaq Composite Index recovered slightly to close near $19,610 on Wednesday, the sharp rejection from $19,800 wiped out all the intraday gains. What made the decline more significant was the accompanying surge in volume. For four consecutive bullish days, volume has been climbing. However, Wednesday's price decline had the highest volume against the prior uptrend, which signals aggressive short positioning by institutional traders. That shift in participation erase most of the weekly gains, cutting the week-to-date return down to just 0.4%.
Nasdaq approaches 20-day EMA at $19,440 raising breakdown risk
Technically, the rising wedge structure is still holding, but the space is tightening. Price is now sitting closer to the wedge's lower boundary, which increases the risk of a downward breakout. If that happens, the index is likely to find short-term support at $19,440, where the 20-day EMA currently sits on the 4-hour chart.
The situation now reflects a critical turning point. Despite the bullish reaction to soft inflation, sellers stepped in immediately and forced a 250-point dip from Wednesday’s high. That makes today's price action important. A continuation of Wednesday’s momentum could confirm a breakdown, exposing the index to further losses.
Until then, the technicals, and fundamentals are sending a mixed message. CPI data suggests the inflation environment is easing, which should support risk assets. But the failure to hold gains and the sharp reversal suggest markets are looking past the CPI and focusing on structural resistance and positioning. The next move depends heavily on whether bulls can protect the previous day low at $19,550 and the EMA at $19,440.
Nasdaq kept rising through June, but momentum slowed inside a tightening wedge. Price hovered near breakout as traders watched $19800 and downside levels for direction.
