High capital expenditures and bearish technical signals drive Nasdaq 100 lower by over 3%

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Nasdaq 100 slides 3.28% today

Highlights

The Nasdaq 100 fell 3.28% after disappointing earnings from Amazon, Intel, and Alphabet raised concerns about high AI spending.
Alphabet's earnings miss led to a widespread selloff in technology stocks, pushing institutional flows toward fixed-income assets.
The index trades below key short- and medium-term averages with bearish indicators, forecast to move between 27,609 to 28,853 over five days.

Capital expenditure concerns prompt tech selloff and asset rotation

The Nasdaq 100 index declined following weak earnings reports from major technology sector companies such as Amazon, Intel, and Alphabet. These results heightened concerns about high capital expenditures in artificial intelligence. Alphabet's earnings miss contributed to a broad decline in technology stocks and prompted institutional investors to consider reallocating towards fixed-income assets.

Anton Kharitonov, expert at Traders Union, sees a clear deterioration in sentiment following disappointing results from major tech players. He notes that the Nasdaq 100 trading below key 20-day and 50-day moving averages signals unrelenting downside momentum. The failure of AI-driven spending to deliver immediate results is driving capital outflows and reshuffling by institutions. Technical indicators confirm persistent selling pressure, with little appetite for dip buying. "Until core fundamentals improve and earnings stabilize, I expect sellers to dominate and urge investors to remain defensive," says Kharitonov.

Viktoras Karapetjanc, expert at Traders Union, acknowledges the recent volatility but emphasizes that the longer-term bullish structure of the Nasdaq 100 is still intact above the 200-day average. He sees the pullback as a healthy reset that opens up attractive opportunities for forward-looking investors. Despite sector rotation and near-term pressure, he highlights the market’s capacity for recovery as institutional flows adapt. "While short-term turbulence is normal, further growth is expected as the broader index fundamentals remain solid," Karapetjanc states confidently.

Parshwa Turakhiya, analyst, highlights that weak earnings headlines have fueled negative sentiment and intensified short-term selling in the Nasdaq 100. He observes increased volatility and fading demand, but notes the index is not yet technically oversold. For traders, this setup presents tactical downside follow-through as well as a possible stabilization play around the 200-day average. "With momentum signals bearish and price near session lows, I see short-term opportunities on both sides for nimble traders," says Turakhiya.

Bearish momentum as Nasdaq holds above long-term support

Nasdaq 100 is currently trading below both its 20-day ($30,054) and 50-day ($29,813) moving averages, indicating short- and medium-term pressure from sellers, but remains above the 200-day ($27,912) average, which supports its longer-term bullish structure. Nearest resistance is at $28,472 (today's low), with the 200-day at $27,912 acting as immediate floor and the Ichimoku Kijun at $30,102 confirming broader resistance overhead. Momentum signals are bearish as both MACD and Average Directional Index (ADX) point to selling pressure. The Relative Strength Index (RSI) at 44.39 and Commodity Channel Index (CCI) at -66.8 both issue sell signals, indicating fading demand but not yet oversold conditions, while Stochastic RSI is neutral at 43.18. Bull/Bear Power (BBP) at -137.36 confirms sellers are firmly in control and currently in oversold territory. The index is trading at $28,439 after a decline of 963.213 points or 3.28%. Price is holding near the session low, with intraday volatility standing at 0.85%. Intraday tone remains weak with sellers dominating after the opening gap and indicators confirming renewed downside pressure.

Earlier, analysts noted that heightened scrutiny over artificial intelligence investment returns and rising capital expenditures were weighing on the Nasdaq 100’s performance. The latest technical signals and weaker earnings reinforce this view, with downside risk concentrated around the $27,912 support level as a break below could set the stage for further near-term losses.

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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