Nasdaq Index: 50-Day Test Holds as Semiconductor Sellers Await Nvidia

Semiconductors Drag the S&P 500 While Financials Hold the Dow

The S&P 500 and Nasdaq are trading lower late Monday. Semiconductor stocks are doing the damage. The Dow went the other way on strength in financials. The split between the indexes tells the story of this session. The Nasdaq traded down to its 50-day moving average during the session and buyers showed up near that level. The chip group has not recovered.

Nvidia reports Wednesday after the close and the semiconductor trade goes into that number already weakened. The 30-year yield held above 5% Monday even after the Treasury buyback report took some pressure off the long end. PCE inflation data lands the same day as Nvidia. Warsh speaks at Jackson Hole Friday.

At 18:30 GMT, the Dow Jones Industrial Average was up 149.17 points, or 0.28%, at 53,426.18. The S&P 500 was down 13.39 points, or 0.17%, at 7,660.98. The Nasdaq Composite was down 126.66 points, or 0.48%, at 26,053.80.

Daily Nasdaq Composite (IXIC) Technical Analysis

The Nasdaq Composite is under pressure late in the session on Monday. The main trend is up according to the daily swing chart, but the minor trend is down. This is creating the downside momentum.

A trade through 26875.52 will reaffirm the main uptrend. A move through 24425.34 will change the main trend to down.

A trade through 26456.78 will change the minor trend to up. This will shift momentum to the upside.

Earlier today, the index tested the 50-day moving average at 25995.55. Although the index fell to 25910.52, buyers did come in to recover the 50-day MA. If the selling pressure resumes then look for the move to extend into the short-term retracement zone at 25650.43 to 25361.31.

The current price action suggests traders’ reaction to the 50-day will set the tone.

Micron’s Drop Says the Chip Selling Is Not One Stock Deep

The Philadelphia Semiconductor Index dropped 2.6% Monday. Nvidia lost 2.3% and Broadcom fell 2.1%. Micron took the hardest hit at almost 5.6%. Memory pulled the rest of the group lower. The S&P 500 technology sector extended last week’s selling.

Nvidia reports Wednesday after the close. The stock is already down heading into the number. Nvidia does not need to miss for chips to keep sliding. It needs to beat and make the market want to own the group again. AI spending and data-center demand are what the market needs to hear. The stock is priced for acceleration and anything short of that gives sellers more room to work.

The Dow’s Gain Masks a Session That Favored Sellers

Financials gained about 1% Monday. JPMorgan Chase rose 1.1% and Visa added 2.5%. Those gains kept the Dow in the green while the S&P 500 and Nasdaq absorbed the full weight of the technology selloff.

The breadth numbers tell the real story. Declining stocks outnumbered advancers by a 1.21-to-1 ratio on the New York Stock Exchange. The Nasdaq posted 71 new highs against 80 new lows. More stocks made new lows than new highs on a day the Dow was green. Buyers are selective. They are picking spots in financials and leaving the growth trade alone.

Yields Backed Off but the 30-Year Stayed Above 5%

CNBC reported Monday that Treasury Secretary Scott Bessent could use the department’s near-$1 trillion General Account to fund expanded bond buybacks. Yields came down. The 30-year pulled back a few basis points. None of it took the 30-year below 5%. The long bond hit a 19-year high last week and Monday’s relief did not undo that move.

Washington expanded secondary sanctions on entities doing business with Iran Monday. Iran sanctions are pushing crude higher heading into a PCE report that arrives Wednesday with income, spending, and a GDP revision. The 30-year is above 5% and the Fed has not ruled out another increase. Warsh follows at Jackson Hole Friday. His first keynote as Fed Chair comes after the market has already absorbed both the PCE number and Nvidia’s report. Nothing on this calendar helps the long bond settle down.

Stocks in the News

Ford dropped after tariffs on Canadian cars and auto parts jumped to 50% on January 1. Trade talks collapsed over the weekend and General Motors fell on the same threat. J.B. Hunt lost ground as the tariff threat spread into the transportation sector.

What to Watch

Nvidia Wednesday is what matters for the S&P 500 and Nasdaq. The chip group is already under pressure going into the report. PCE lands the same day and the 30-year has not dropped below 5%. Warsh follows Friday. The Dow has financials underneath it. The broader market does not.

The Nasdaq tested its 50-day moving average Monday and held. The minor trend is down and the reaction to that level is setting the tone heading into Nvidia. The chip sellers have been asking the same question since last week. Wednesday is when they get an answer.

More Information in our Economic Calendar.