S&P500 and Nasdaq Index: Traders Brace for Jobs Data as Weak Breadth Raises Concerns for US Indices

Is the S&P 500’s Mid-Session Break Below Its 50-Day Average Signaling Further Weakness?

U.S. equities extended their losses on Tuesday as the S&P 500 traded below its 50-day moving average for a second straight session, raising concerns that the pullback may run deeper.

The index’s break below the level on Monday ended its longest stretch above it since 2007. By mid-session on Tuesday, selling pressure remained focused on tech and AI-related names, which have been unwinding after driving markets to record highs earlier in the year.

What Do Market Indicators Suggest About Current Risk Appetite?

LPL Financial pointed out that only 51% of S&P 500 components were trading above their 200-day moving averages, signaling weakening participation beneath the surface. At around 18:00 GMT, the Dow was lower by 0.68%, the S&P 500 had slipped 0.32%, and the Nasdaq was down 0.58%.

Analysts noted that sentiment had grown complacent following months of resilient gains, and defensive sectors were beginning to take the lead for the first time in seven months. Commentary from market strategists continued to highlight concerns about stretched valuations, especially in AI-linked names.

How Are Tech and AI Leaders Performing During the Selloff?

Tech remained the focal point of the retreat. Nvidia traded 2% lower ahead of its earnings report due after Wednesday’s close, extending Monday’s pullback and sitting 12% below its record high.

Amazon dropped 3.1%, while semiconductor stocks weakened broadly, sending the SOX Index down 1.7%.

Remarks from Alphabet’s CEO that no company would be untouched in an AI downturn added to the cautious tone.

Traders are treating Nvidia’s upcoming results as a crucial indicator of whether enthusiasm for AI can regain traction or further cool during the final stretch of the year.

Which Corporate Developments Are Influencing Sector Moves?

Eight of the S&P 500’s 11 sectors traded in the red by mid-session, led by information technology and consumer discretionary.

Home Depot fell 3.4% after projecting a larger full-year profit decline, while Lowe’s was modestly lower.

With Walmart and Target set to report this week, traders are preparing for fresh clues on consumer resilience.

 

The CBOE Volatility Index hit a one-month high as investors reassessed the likelihood of a December rate cut.

What Key Data Should Traders Monitor Next?

The delayed September jobs report is scheduled for Thursday and is expected to echo signs of cooling seen in earlier surveys. Continued jobless claims recently reached a two-month high, while market-based odds of a December rate cut have fallen to about 50% from more than 93% a month prior.

With the S&P 500, Dow, and Nasdaq all trading lower by mid-session and holding below their recent momentum markers, traders are watching for whether upcoming labor data and Nvidia’s results can steady sentiment or extend the pressure on the major indexes.

Although LPL maintains a constructive longer-term view supported by earnings and expected easing, market direction over the coming sessions will likely hinge on how these catalysts shape expectations heading into year-end.

More Information in our Economic Calendar.