S&P 500 falls nearly 2% as tech earnings disappoint and weak cash flows trigger broad selloff

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S&p 500 slides 1.62% today

Highlights

The S&P 500 fell 1.62% as technology stocks declined after weak earnings and negative cash flow announcements from Alphabet, Meta Platforms, and Tesla.
Market participants rotated into U.S. Treasuries and the dollar, focusing on concerns about artificial intelligence spending and large-cap tech earnings outlooks.
The S&P 500 trades below short- and medium-term moving averages with a forecast range of 7,494 to 7,653, and neutral-to-bearish momentum signals suggest near-term consolidation.

Investor rotation intensifies as tech sector triggers risk-off mood

The S&P 500 recorded a notable decline as the technology sector led losses following weaker-than-expected earnings and negative cash flow news from companies such as Alphabet, Meta Platforms, and Tesla. This downturn was accompanied by a rotation into U.S. Treasuries and increased demand for the U.S. dollar amid a risk-off environment. Investor concerns centered on the sustainability of spending in artificial intelligence and the outlook for tech earnings. Ongoing anxiety about large-cap tech and tighter financing conditions continued to influence market volatility.

Anton Kharitonov, expert at Traders Union, points to pronounced selling across the S&P 500, with both technical indicators and weak tech earnings confirming risk-off sentiment. He notes the breach below short- and medium-term moving averages, while fundamentals look fragile amid persistent concerns over AI-related spending and cash flow. Kharitonov highlights the downside gap and looming market volatility as warning signals. He is skeptical of a quick recovery, emphasizing that mixed momentum indicators leave little evidence of sustained buyer conviction. "Market risks are underestimated here — any break below 7,494 would likely trigger a new wave of selling," says Kharitonov.

Viktoras Karapetjanc, expert at Traders Union, sees near-term losses as temporary within a bullish long-term structure. He notes strong macro drivers are still intact, with high institutional interest and global capital rotating defensively but not leaving the market. Karapetjanc emphasizes that the index remains above its 200-day average, maintaining long-term upside expectations. He believes recent volatility opens new opportunities as most indicators remain neutral-to-positive. "The S&P 500 offers attractive setups for traders, and a breakout above 7,596 should pave the way for further growth," says Karapetjanc.

Sholanke Dele, market strategist, is cautious about the S&P 500's outlook following a sharp selloff in technology shares. He notes risk appetite remains low, with a clear shift into Treasuries and defensive assets. Dele warns that continued anxiety around tech earnings may weigh on investor sentiment and stall any quick rebound. "Persistent doubts about sector leadership suggest downside risks are not yet fully priced in," Dele states.

Short-term selling leads as momentum signals diverge near support

The S&P 500 is trading below its 20-day (7,737) and 50-day (7,698) moving averages, yet remains above the 200-day (7,306) long-term average, indicating prevailing selling pressure in the near to medium term on a structurally bullish long-term backdrop. Resistance is present at 7,596, with initial support at 7,494. Momentum signals are mixed, as MACD and ADX are neutral, RSI is in buy territory, and both CCI and Stochastic RSI remain neutral. Bull/Bear Power (BBP) is positive at 18.49, suggesting intraday buyer activity but an overbought caution. The index trades close to the session low after a downside gap and volatility amplitude stands at 0.54%, with session momentum aligned to the downside despite some buyer presence.

Previously it was reported that analysts expected near-term bearish pressure on the S&P 500 following disappointing technology sector earnings and heightened risk-off sentiment. The current analysis reinforces that view, with ongoing tech sector weakness and tightening financial conditions keeping the index vulnerable, making the 7,494 support level a critical threshold to monitor for signals of further downside risk.

Source of Data: SPX 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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