Nasdaq pulls back as market repositions before Powell remarks

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Nasdaq reverses 220 points from record high

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Sholanke Dele

30.07.2025

Nasdaq pulls back as market repositions before Powell remarks — Nasdaq trades near key support zone

The Nasdaq Composite Index touched a fresh record high on Tuesday at 21,306 before reversing sharply lower to close at 21,085. The late-session pullback of more than 220 points erased the day’s 0.6% intraday gain and left the index with a 0.4% daily loss. This marks the first down close day in red of the past five and brings the week-to-date performance into negative territory.

• Nasdaq slips after hitting record high at 21,306 as investors book profits ahead of Fed decision

• Fibonacci retracement suggests the Nasdaq is testing key technical support

• Retail flows at 10% show aggressive dip-buying even as institutions turn cautious

The reversal came as investors took profits ahead of the Federal Reserve’s policy decision scheduled for Wednesday. Despite widespread expectations that the Fed will leave interest rates unchanged at 4.50%, the market is on edge over how Chair Jerome Powell will address broader concerns, including trade agreements, tariff impacts, inflation expectations, and political pressure from the White House.

Nasdaq price dynamic (July 2025). Source: Tradingview

Tuesday’s session reflected broader caution across both equity and bond markets. Treasuries saw yields dip, highlighting the defensive stance taken by market participants in anticipation of the Fed’s guidance.

Nasdaq RSI show market indecision as price retests former supply-turned-support

While institutional players showed hesitation, retail investors have continued to play a significant role in the recent Nasdaq rally. Flow data from last week shows that retail investors made up over 10% of total equity flows, the highest since February. This active retail participation is a shift from the usual narrative where small investors enter late in rallies. Instead, recent positioning suggests that optimism around second-quarter earnings, resilient macro data, and hopes of future rate cuts have pushed retail traders to re-enter risk assets even as geopolitical and fiscal concerns linger.

From a technical standpoint, the Nasdaq’s hourly RSI stands at 50 as of Wednesday, July 30, reflecting indecision at the current levels. On the 4-hour chart, the index appears to be retracing toward a potential support zone near 21,050. This level holds significance as it aligns with a previous supply zone turned support and also encapsulates the Fibonacci 50% and 61.8% retracement levels from the recent swing. Additionally, the 50 EMA on the 1-hour chart is reinforcing this support range.

The near-term direction now hinges on the outcome of the Fed meeting. If Powell strikes a balanced tone or hints at dovish flexibility, the Nasdaq could bounce off this support and retest the all-time high. On the other hand, a more hawkish message could trigger a deeper correction, especially if investor expectations around easing are tempered.

Nasdaq Composite rose after Trump denied the Powell firing rumor. Nasdaq Composite bounced near the 4-hour 20 EMA and closed at a new high of 20,730.

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