Nasdaq Pushes Lower
The Nasdaq remains under heavy selling pressure across early European trading on Tuesday. The index is now down almost 3% from the all-time highs printed last week. The drop lower has been largely attributed to the correction we’re seeing in Nvidia.
Nvidia Volatility
After a rally last week saw the stock becoming the most valuable in the world, overtaking Microsoft and Apple, shares plunged by around 16%. The plunge in Nvidia’s stock is being linked to profit taking on the back of last week’s news. Fundamentally, the picture remains the same and the stock is expected to recover though we could see the current correction run a little further.
Shifting Fed Views
The downturn in the Nasdaq also comes amidst a slight uptick in September easing expectations over recent days. CME pricing for a cut in Q3 has jumped back up to 60% from less than 50% on the back of the FOMC. Yesterday, Fed’s Daly warned of a coming inflection point in the US labour market which could lead to higher unemployment, having a dampening effect on inflation.
Core PCE On Watch
Looking ahead this week, traders will be watching a slew of incoming US data with core PCE on Friday the headline event. If we see any fresh weakness in this reading, that should further bolster September easing expectations, weighing on USD and helping stocks recover.
Technical Views
Nasdaq
The reversal lower in the Nasdaq has seen price turning back down into the middle of the bull channel. With momentum studies weakening, focus is on a test of the 18,912.17 level and the bull channel lows. This will be a key support area for bulls to defend to prevent a deeper move.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.