Nasdaq 100: Tech Stocks Retreat From Record High on Profit-Taking, Valuation Concerns

Nasdaq Reverses After Record High as Dow Climbs on Fed Cut Hopes

U.S. stocks built on their rally Wednesday, with the Dow Jones rising over 300 points and the S&P 500 setting another intraday record. Early enthusiasm faded in the Nasdaq, which turned negative midday after briefly touching new highs, as traders reassessed stretched tech valuations and rotated into other sectors.

The Dow gained 329 points, or 0.7%, while the S&P 500 added 0.1%. The Nasdaq Composite, weighed down by losses in key growth names, hovered near flat after hitting a fresh peak earlier in the session. Optimism over a potential September rate cut by the Federal Reserve continued to drive broader sentiment, with CME FedWatch data showing a 99% probability of a policy pivot next month.

Are Tech Stocks Losing Momentum as Traders Take Profits?

The Nasdaq 100’s pullback followed notable weakness in high-growth names. Applovin dropped 5.14%, and Axon Enterprise slid 3.42%. Strategy Inc. and Palantir fell over 1%. Semiconductor names like Broadcom and Nvidia also slipped, dragging on index performance.

Meanwhile, AMD surged more than 6% following renewed bullishness on AI chip demand. Apple added 1.28%, helping to cushion the tech-heavy index. Yet the mixed bag suggests some profit-taking is underway after a strong run in the sector, especially with many stocks trading near 52-week highs.

Which Sectors and Stocks Powered the Dow and S&P 500?

Media stocks led the charge. Paramount Skydance soared over 22%, logging its best day since 2020 on unusually heavy volume. Warner Bros Discovery jumped nearly 7% after insider buying activity boosted confidence. Webtoon Entertainment rocketed nearly 90% after a strong Q2 earnings report and a content deal with Disney.

Elsewhere, defensive names and consumer staples gained ground. PepsiCo, Paychex, and Comcast all rose more than 1%, with investors rotating into names less exposed to high-rate environments. Apple, Intel, and Qualcomm also posted solid gains, contributing to broader index strength.

Is Amazon’s Grocery Push Putting Pressure on Rivals Like Walmart?

Walmart stock fell 2% after Amazon unveiled same-day grocery delivery for Prime members in 1,000 cities, with expansion plans targeting over 2,300 locations. The move raised fresh concerns about grocery competition, dragging down Kroger, Albertsons, and Instacart, which dropped over 10%.

Amazon shares, by contrast, rose 1.26%, suggesting traders viewed the news as another strategic win in its push into physical retail and logistics.

What’s Next for Nasdaq Traders as Economic Data Takes Center Stage?

The next key input for markets comes with Thursday’s Producer Price Index, following this week’s encouraging CPI report. Another soft read could reinforce expectations for a September rate cut, already priced in at 99% according to CME FedWatch.

For the Nasdaq 100 futures, traders should keep an eye on 24,068.50 as the recent high, with nearby support at 23,845. Additional downside levels include 22,775 and 21,566.75, in line with the 50- and 200-day moving averages now sitting at 22,843.5 and 21,570.08 respectively.

With the Jackson Hole symposium later this month and retail earnings on deck, market direction may hinge on confirmation of a Fed pivot and sustained earnings strength.

More Information in our Economic Calendar.