Nasdaq 100, Dow Jones, S&P 500 News: Nvidia Lower, Crypto Markets Shaken Amid Rate Hike Fears

Nasdaq-100 Index Under Pressure Amid Tech Declines and Fed Meeting

The Nasdaq-100 Index experienced significant pressure on Tuesday, primarily due to notable declines in major technology stocks such as Nvidia. This trend coincided with the Federal Reserve’s two-day policy meeting, capturing Wall Street’s attention.

At 15:15 GMT, the Dow Jones is trading 38964.73, up 174.30 or +0.45%. The S&P 500 Index is at 5146.94, down 2.48 or -0.05% and the Nasdaq-100 Index is trading 16035.16, down 68.29 or -0.42%.

Tech Stocks Retreat

Nvidia, a leading chip manufacturer, saw a 2.1% decline following its first-ever GTC Conference, where CEO Jensen Huang introduced the advanced AI chip ‘Blackwell.’ Despite a substantial year-to-date rally of over 78%, the announcement triggered a profit-taking response among investors. Similarly, Super Micro Computer, an essential vendor for Nvidia’s AI servers, faced a 10% drop after announcing a share offering. The stock had previously surged 250% in the current year.

Crypto and Bitcoin Turbulence

In the cryptocurrency sector, significant fluctuations were evident. Microstrategy’s stock plummeted by more than 15%, reflecting Bitcoin’s 6.5% decline to $62,749.99. Other crypto-related stocks like Coinbase and mining giants Riot Platforms and Marathon Digital also experienced notable decreases.

Rate Hike Anticipation and Market Digestion

As the Federal Reserve’s decision on interest rates loomed, the market braced for potential signals of prolonged high rates. Sam Stovall of CFRA Research suggested that the market might face a more profound or delayed correction than anticipated. However, the AI sector’s long-term potential was emphasized, implying that current declines were temporary adjustments.

Retail and Economic Outlook

In the retail sector, Nordstrom’s shares surged 12% amidst rumors of the founding family considering taking the company private. This move reflects a broader economic sentiment where forecasters in the CNBC Fed Survey express increasing confidence in the U.S. economy’s resilience, expecting a soft landing despite potential rate adjustments by the Federal Reserve.

Short-Term Market Forecast

Given the current market conditions, a cautious yet optimistic outlook is advisable. While the technology sector faces temporary setbacks, the underlying growth potential, especially in AI, remains strong. The Fed’s upcoming decisions may introduce short-term volatility, but overall, the market is expected to resume its upward trajectory, albeit with a watchful eye on inflation and rate policies. The blend of technology advancements and resilient economic indicators suggests a bullish trend for the short term, barring unforeseen macroeconomic disruptions.

Technical Analysis

The E-mini Nasdaq-100 Index is lower on Tuesday, putting it in a position to challenge the 50-day moving average at 17945.05. This MA is major support. It has been guiding the market higher since November 3.

The intermediate trend will turn lower if the 50-day MA is taken out with conviction. This move could trigger an acceleration to the downside.