We’re starting to see the pressure build up again as we look to European morning trade today. That after the heavy selling in Wall Street amid continued concerns on the AI trade and potential disruptions surrounding the technology itself. It’s creating quite a vortex of volatility, and it is one that might take some time to work out.
S&P 500 futures are now down 0.4% with Nasdaq futures down 0.5% on the day. Meanwhile, Dow futures are down 0.3% currently.
Here’s the S&P 500 performance breakdown snapshot for yesterday:
And here’s the one for the Nasdaq:
The big names creating a drag are all pretty much overlapping, as it is a tech-driven rout. But what is interesting about all of this is that despite all the concerns and recent pessimism, the S&P 500 is still just less than 2.5% away from its record high after the close yesterday. By that metric, it really doesn’t look like a market that is in trouble whatsoever.
However, sentiment is rather fragile and that can lead to exacerbated moves on the charts when push comes to shove.
Right now, the S&P 500 is closing in on its 100-day moving average once again and that is a key technical level to take note of. It has helped to arrest previous declines and challenges to the upside momentum. However, a firm break this time around alongside a handful of triggers for sellers to work with could result in a sharp correction lower on a break.
The Nasdaq has already taken out the same key technical level last week and the drop yesterday reinforces the momentum after a brief bounce on Monday. So, a coinciding break from the S&P 500 might be just the right trigger point for sellers to go in search of a stronger retracement lower for stocks to end the week.
This article was written by Justin Low at investinglive.com.
