Nasdaq Index: Bearish Divergence Grows as Nasdaq Composite Tests 50-Day MA

Nasdaq Slides as Tech Rotation Deepens, 50-Day Average Back in Focus

The Nasdaq Composite is sharply lower at mid-session, down more than 1%, though it’s no longer at the lows. After slipping to 23094.51 earlier, buyers showed up near the 50-day moving average at 23115.56, trimming losses but not changing the tone. This still feels like a market in distribution, not one gearing up for a fresh leg higher.

Is the Nasdaq Rolling Over Below a Lower High?

From a chart perspective, the setup is getting uncomfortable. A secondary lower top appears to be forming near 23698.93, well below the main peak at 24019.99.

That pattern leans bearish, especially with the index now probing its 50-day average. A clean break below that level, along with the nearby pivots at 22959.14 and 22798.61, would put the November 21 low at 21898.29 squarely on traders’ radar. For now, buyers are defending the first line, but conviction looks thin.

Why Is Tech Leading the Market Lower?

The selling pressure is coming straight out of big-cap tech and semiconductors. Broadcom is down roughly 10%, dragging the Nasdaq and the S&P 500 with it after investors zeroed in on margin concerns, even though earnings beat expectations and AI chip sales guidance was strong.

That reaction says plenty about sentiment. The market is no longer rewarding good news in crowded AI trades, and names like AMD, Micron, and several chip equipment stocks are sliding in sympathy.

This isn’t panic selling, but it is profit-taking with purpose. Traders are trimming exposure where gains have been largest, and they’re doing it quickly when headlines give them an excuse.

Where Is the Money Rotating Instead?

 

While the Nasdaq struggles, the Dow is holding up better after tagging a fresh intraday high earlier in the session. Financials, health care, and industrials are catching inflows, with Visa, Mastercard, UnitedHealth Group, and GE Aerospace all seeing buying interest. That lines up with a classic value-over-growth rotation day, especially notable after the Federal Reserve’s third rate cut of the year.

Consumer names are mixed. Lululemon stands out, jumping after announcing a CEO departure alongside an earnings beat, while Costco is slipping despite topping expectations. Stock-specific stories are still working, just not in tech leadership.

What’s the Setup From Here?

Bottom line, the market wants to de-risk tech exposure, at least near-term. Unless buyers can reclaim ground quickly above the 50-day average, rallies in the Nasdaq are likely to be sold rather than chased.

A decisive break lower would shift attention to deeper downside levels, while stabilization here could still turn into a choppy consolidation if rotation continues without broader selling pressure.

Traders should stay alert to whether dip-buying shows real follow-through or fades fast.

More Information in our Economic Calendar.