NSDQ100 overbought pullback - dip buying opportunity? Equities saw a sharp reversal yesterday, led by weakness in tech and AI-related names. While it was only a single day’s selloff, sentiment has clearly shifted toward caution, with growing talk of a potential equity correction.
Market Dynamics
The Magnificent 7 stocks fell -2.28%, driving the Nasdaq 100 lower as investors reassessed stretched valuations.
Palantir (-7.9%) and Nvidia (-4.0%) were key drags, emblematic of overextended tech momentum — even positive earnings guidance wasn’t enough to support prices.
Broader weakness spread across the market: S&P 500 -1.17% (worst day since Oct 10), equal-weight S&P -0.63%, and Russell 2000 -1.78%.
The S&P ex-Mag-7 was down -0.75%, underscoring the narrowness of recent gains and rising concern over market concentration.
Macro & Other Drivers
The risk-off tone boosted Treasuries: 2yr yield fell to 3.58%, 10yr to 4.09%.
Broader sentiment was pressured by a prolonged U.S. government shutdown (now 36 days, the longest ever) with growing economic cost estimates ($10–30bn/week).
Bitcoin briefly recovered above $100k, but large holders sold ~400,000 coins (~$45bn), adding to the risk-aversion tone.
Political Context
Zohran Mamdani’s election as New York’s first democratic socialist mayor and new housing initiatives grabbed headlines but had limited market impact.
Takeaway for Nasdaq 100
The Nasdaq 100 faces renewed selling pressure as investors rotate out of AI-heavy leaders and take profits after a long rally.
Focus today will be on whether dip-buyers step in or if the correction broadens.
Key near-term catalysts: U.S. ISM Services and ADP employment data, plus earnings from Qualcomm, ARM, and DoorDash later today — all potential volatility triggers for tech sentiment.
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