The US Nasdaq 100 was hit by selling this week after a series of issues weighed on investor sentiment.
NAS 100 – Daily Chart
The NAS 100 has fallen after hitting an obstacle at the all-time highs near 26,264. The price is now testing support at 24,742, with further buyer support at 24,000.
Markets had been weak after Trump’s Fed nomination led to a cut in bearish interest rate cut expectations.
However, a sharp slide in crypto markets and fears over an Anthropic AI tool have further affected markets. A bearish outlook from investor Michael Burry has accompanied bitcoin’s slide below $68k.
Writing in his Substack, Michael Burry said the recent drop in the value of gold and silver suggested that investors were being forced to sell due to collapsing cryptocurrency prices.
He wrote: “It looks like up to $1 billion in precious metals were liquidated at month’s very end as a result of falling crypto prices.
“There is no organic use case reason for Bitcoin to slow or stop its descent,” he added.
He warned that weakness could mean that Bitcoin miners would start to go bankrupt and that could trigger ‘a collateral death spiral’ and then ‘tokenized metals futures would collapse into a black hole with no buyer’.
Adding to the bearish tech sentiment was news of a new AI tool from Anthropic that threatens to upend another industry. Claude Cowork is built as an AI colleague, with the ability to read files, organize folders and draft documents. That put pressure on software stocks amid fears that the key software-as-a-service business model that’s driven the tech world is now at risk of disruption.
“Why do I need to pay for software, the thinking goes, if internal development of these systems now takes developers less time with AI?” said Thomas Shipp, head of equity research at LPL Financial.
“Furthermore, with the release of offerings like Anthropic’s Claude Cowork, an application with access to read and edit files, fewer technical users are now empowered to replace existing workflows”.
Investors need to be careful of dip buying at these levels, as institutions could get nervous about their crypto and tech holdings.
