The Nasdaq 100 Index retreated by over 1.3% on Monday as traders reacted to the new tariffs by Donald Trump. It also dropped as they waited for the upcoming NVIDIA earnings and as software stocks continued falling. It retreated to $24,665, down by 6% from its highest level this year.
NVIDIA Earnings and Software Jitters
The Nasdaq 100 Index remained under pressure after Donald Trump announced new tariffs after the Supreme Court ended the previous ones. The US will charge a flat 15% tariff on all goods coming to the United States, a move that has led to more confusion among corporations.
Meanwhile, the Nasdaq 100 Index dropped as companies in the software industry retreated after a major warning by Jenny Johnson, the head of Franklin Templeton, who runs the $1.7 trillion Franklin Templeton. She warned that enterprise software companies will struggle as new AI tools are launched.
As a result, many top software companies like Salesforce, Microsoft, Intuit, and Workday have slumped into a bear market in the past few months.
The Nasdaq 100 Index will next react to the upcoming Nvidia earnings, which will come out on Wednesday. Historically, these earnings have a major impact on the stock market because of its size and its role in the artificial intelligence industry.
Analysts expect that its revenue and profits will continue soaring in the fourth quarter as competition like Microsoft, Amazon, Meta Platforms, and Google continued spending. The four companies have hinted that they will spend over $650 billion in capital expenditure this year.
In addition to NVDA, more companies will publish their financial results this week, including technology firms like Workday, Synopsys, Zoom Video, Salesforce, Intuit, Dell, and Autodesk will publish their financial results.
Also, the index will react to the upcoming statements by top Federal Reserve officials like Raphael Bostic, Michele Bowman, Lisa Cook, Christopher Waller, and Austan Goolsbee. These officials will provide more information about what to expect from the bank in the next meetings.
Nasdaq 100 Index Technical Analysis
The daily timeframe chart shows that the Nasdaq 100 Index retreated to $24,710, down sharply from the year-to-date high of $26,177.
It has moved below the 50-day Exponential Moving Average (EMA). Also, the Percentage Price Oscillator (PPO) and the Relative Strength Index (RSI) have formed a bearish divergence pattern.
Therefore, a move below the key support level at $24,385 will confirm the bearish outlook and point to more downside, potentially to $24,000.