As traders consider the rate cut path, US tech stocks have stumbled ahead of the psychological 20,000 level.
NAS 100 – Daily Chart
The price of the NAS 100 index has faltered ahead of the 20,000 level. There is support at the current price, with a move below possibly opening another correction to 18,250.
Wall Street stocks finished lower on Thursday with a big dent in chipmakers as central bankers met at the Jackson Hole Economic Symposium. Investors will be hanging on the Friday speech from Fed Chair Jerome Powell to gauge the trajectory for US interest rate cuts.
Market heavyweight Nvidia sank 3.7% ahead of the AI chipmaker’s quarterly report next week, which could have a significant bearing on the path of tech stocks.
Money markets are pricing in a 75% chance of a 25 basis point cut and a 25% chance of a 50 basis point cut at the Fed’s September policy meeting, according to a CME Fedwatch tool.
Sentiment was hurt after Boston Fed President Collins said she expects the central bank to begin easing rates soon. However, “a gradual, methodical pace” of cuts is likely appropriate. Philadelphia Fed President Harker echoed that statement, saying “a slow, methodical approach to lowering rates is the right way to go”.
Markets have also been absorbing negative news on the US jobs market after an early revision downgraded a recent payrolls improvement by -818k jobs, the most significant downgrade since 2009 at the tail end of the financial crisis.
The current price level will be necessary ahead of earnings next week, led by chipmaker Nvidia.
