Nasdaq Composite correction deepens 3.5% weekly amid warnings from Wall Street

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Sholanke Dele

07.11.2025

Nasdaq Composite correction deepens 3.5% weekly amid warnings from Wall Street — Nasdaq loses over 3.5% this week

The Nasdaq Composite Index extended its weekly losses on Friday as sellers maintained pressure following Thursday’s steep decline that broke key technical support levels. The index dropped below the 23,000 psychological threshold after Thursday’s 1.8% slide, marking its largest one-day loss in three weeks and reinforcing the view that the recent correction from the October record high at 24,000 has not yet stabilised.

- Nasdaq loses over 3.5% this week as sellers intensify pressure near 23,000.

- RSI weakness and EMA breaks signal fading momentum across growth-heavy technology stocks.

- Fibonacci 61.8% retracement at 22,900 could determine if correction stabilises or deepens.

Thursday’s session was pivotal as the Nasdaq fell through both the base of its rising channel at 23,300 and the 20-day EMA at 23,230, triggering broad-based selling across major technology stocks. The decline found temporary relief near 23,000, where price managed to close at 23,050, cushioned by short-term buying interest at that psychological support. However, momentum indicators weakened sharply. The RSI shifted from bullish to neutral territory, indicating that upward drive has stalled and investors are now searching for directional conviction.

Nasdaq price dynamic (Sept - Nov 2025). Source: Tradingview

In premarket trading on Friday, Nasdaq futures slipped another 0.56%, or roughly 135 points, deepening the week-to-date loss to over 3.5%, equivalent to about 880 points. This marks the most bearish weekly performance since March 2025. The pullback has been influenced not only by technical breaks but also by renewed caution among institutional investors following warnings from Wall Street executives at Morgan Stanley and Goldman Sachs about potential overvaluation in the technology sector.

Nasdaq RSI shift to neutral confirms fading bullish momentum across tech sector

Investor sentiment has also cooled as concerns mount over monetisation challenges in AI-related businesses and the circular spending patterns within the tech ecosystem. Many traders see this correction as a reflection of profit-taking after the extended rally that lifted the index by nearly 50% since midyear. The recent price action now suggests that risk appetite across the Nasdaq’s growth-heavy components is shifting to a more defensive tone.

Technically, traders are now watching the Fibonacci 61.8% retracement level at 22,900 for potential support. A sustained hold above that level could provide a base for short-term consolidation or a modest rebound. However, failure to stabilise there would expose the next support zone around 22,660, where the 50-day EMA aligns.

Overall, sentiment across the Nasdaq Composite has turned cautious following a week dominated by selling pressure, valuation concerns, and fading momentum. Whether the index can find footing near 22,900 will determine if the current pullback evolves into a broader correction or stabilises before the next earnings cycle.

We discussed how the Nasdaq retreated 2% to 23,340 after AI-focused stocks triggered a global tech selloff. Nvidia and Palantir losses intensified profit-taking pressure on the Nasdaq Composite.

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