The Nasdaq extended its decline today, shedding another 400 points as investors turned defensive ahead of Nvidia’s earnings. With AI-driven demand under scrutiny, the market is at a crossroads. Can tech sustain its momentum, or is sentiment starting to shift?
Session Overview: Asia & Europe Keep Markets on Edge
The Asian session was uneventful, with price action stuck in a tight range. That calm ended as Europe stepped in, with an initial dip snowballing into a steady 100-point slide before stabilising near (21,300).
Buyers attempted a recovery ahead of New York hours, lifting prices back toward the Asian session highs, but the rally quickly lost steam. Sellers stepped in, capping momentum and keeping the market on edge as US trading approached.
US Session: Nasdaq Stabilises After Early Drop
The Nasdaq faced renewed selling at the US open, sliding to January’s Value Area Low (VAL) and hitting a session low of (20,990). That level sparked a 250-point rebound, but momentum quickly faded. Instead of building on the recovery, price settled into a holding pattern for the rest of the session.
By the close, the Nasdaq had settled near January’s VAL, a level that could prove pivotal as traders’ position ahead of Nvidia’s earnings. With uncertainty dominating sentiment, this could be a key battleground between bulls and bears in the days ahead.
Nvidia, AI Hype, and Market Jitters
Markets remain on edge as Nvidia’s earnings approach, with traders questioning whether AI demand can still justify stretched valuations. Wednesday’s report will be a key moment, either reinforcing confidence in the AI-fuelled rally or exposing cracks in the narrative.
Meanwhile, consumer confidence just saw its steepest drop in over three years, renewing fears of slowing growth and persistent inflation. With traders already cautious, any further signs of economic weakness could tilt sentiment further into risk-off mode.
Source: Conference Board
Technical Outlook: Nasdaq at a Make-or-Break Level
The Nasdaq has been stuck in a range since early December, trading between resistance at (22,400) and support near (20,700). Now hovering around January’s Value Area Low, it sits at a make-or-break level.
Nvidia’s earnings are poised to dictate the market’s next move. A robust report might propel the Nasdaq back into the (22,000s), potentially triggering a breakout to test its all-time high. Conversely, if results fall short, selling pressure could intensify, with a break below (20,700) pushing the index squarely toward (20,000), a level that carries both technical and psychological significance and could fuel further downside
If momentum turns bearish, November’s Value Area Low (20,600) becomes the next key support, with demand evident between (20,700) and (20,800) this quarter. If that zone gives way, the risk of a deeper drop into the low (20,000s) increases. With Nvidia in focus, the next few sessions could shape the Nasdaq’s direction for weeks to come.
Market Outlook: Volatility Ahead as Nasdaq Tests Support
With Nvidia’s earnings looming, the Nasdaq is at a crossroads. A strong report could reignite bullish momentum, pushing the index toward the (21,500s) and beyond. A miss, however, could deepen the sell-off, breaking key support and reinforcing downside risks.
The coming sessions will determine whether the Nasdaq stabilises within its range or gears up for a structural shift. With volatility set to spike, traders are bracing for a decisive move.
