Nasdaq 100: Tech Stocks in Focus Ahead of a Critical Jobs Report | Investing.com

• Markets await US payrolls data, with Fed expectations driving investor sentiment.
• AI stocks remain under pressure as investors question valuations and infrastructure spending.
• Nasdaq 100 continues to consolidate near 30,000 while traders monitor key technical support.

US stock futures traded mixed with slightly lower ahead of today’s closely watched report, while the other indices were holding onto small gains. Investors were understandably reluctant to make big bets before fresh labour market data.

The employment figures are likely to influence expectations for policy, while another sharp sell-off in semiconductor stocks has added to the cautious mood across equity markets.

Jobs Report Set To Drive Sentiment

Federal Reserve Chair Kevin Warsh offered little fresh guidance during his appearance at the ECB Forum in Sintra yesterday, reinforcing the central bank’s data-dependent approach rather than signalling where interest rates may head next.

That leaves today’s June payrolls report as the key event for markets.

Economists expect the US economy to have created around 115,000 jobs last month, compared with 172,000 in May. However, payroll data has consistently surprised to the upside this year, meaning investors remain wary of another stronger-than-expected reading.

The market reaction is unlikely to be straightforward. A report close to expectations would probably be the most favourable outcome for equities, supporting the view that the economy remains resilient without forcing investors to price in more aggressive policy tightening.

A much stronger figure, however, could revive concerns that interest rates will stay higher for longer, while a much weaker-than-expected report would raise fresh questions about the strength of the US economy. With the Independence Day holiday approaching, traders may also look to reduce positions following the data release.

AI Trade Loses Momentum

Technology stocks endured a difficult session yesterday and overnight in Asia as investors continued to take profits in semiconductor names following this year’s remarkable rally.

Micron Technology (NASDAQ:) and SanDisk (NASDAQ:) both suffered double-digit declines on Wednesday, while Nvidia (NASDAQ:) and Broadcom (NASDAQ:) also moved lower. The weakness spread into Asian trading overnight, with Samsung Electronics and SK Hynix dragging South Korea’s sharply lower. Similar selling pressure was evident across several technology stocks in China and Hong Kong.

The move reflects growing concerns that valuations across the AI supply chain have become increasingly demanding. Investors are also paying closer attention to the enormous cost of building AI infrastructure, from advanced chips and data centres to electricity consumption.

Recent corporate updates have reinforced those concerns. Apple (NASDAQ:) recently increased prices across parts of its hardware range, citing rising component costs, highlighting the inflationary pressures facing the wider technology sector.

The AI investment story remains compelling over the longer term, but markets are beginning to demand clearer evidence that heavy capital expenditure will translate into stronger earnings. With hundreds of billions of dollars still being committed to AI development, investors are becoming less willing to overlook the lack of immediate financial returns.

Higher Rates Remain a Headwind

The reassessment of AI is taking place against a backdrop of elevated interest rate expectations.

Should today’s employment report point to continued resilience in the US economy, markets may further increase expectations for policy tightening this year. That would increase financing costs for companies investing heavily in AI, making future earnings growth even more important in justifying current valuations.

For now, the combination of expensive valuations, rising costs and tighter monetary conditions has prompted investors to pause one of this year’s strongest market themes. Whether this turns into a healthy correction, the beginning of a broader repricing, or just a pause remains to be seen. Much will largely depend on whether AI investment starts delivering more tangible profits.

Nasdaq 100 Technical Analysis

From a technical point of view, the chart for the Nasdaq 100 futures continues to point towards consolidation, as it hovers around the psychologically important 30,000 level. The index was clinging onto the 21-day exponential moving average, but has formed a couple of lower highs. Yet, there hasn’t been any major breakdown of key support levels yet.

So, I wouldn’t say we’re in corrective territory just yet. However, that could change as traders potentially take profit during these quieter summer periods, and concerns over the AI trade intensifies.

For now, though, consolidation remains the name of the game.

In terms of key levels to watch, support comes in around the 29,850 to 30,000 area, which previously acted as support and resistance.

Below that, 29,200 is the next support level to watch, followed by 28,660. The most recent swing low from last month sits around 28,227, and that is now the line in the sand. A break below that level would be viewed as a bearish technical development and could pave the way for further selling pressure.

In terms of resistance, 30,500 is the next level of potential hurdle for the bulls. This was tested earlier in the week, before yesterday’s sell-off pushed us back down to 30,000. Beyond that the all-time high at 30,975.

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Disclaimer: This article is written for informational purposes only; it does not constitute a solicitation, offer, advice, counsel or recommendation to invest as such it is not intended to incentivize the purchase of assets in any way. I would like to remind you that any type of asset, is evaluated from multiple perspectives and is highly risky and therefore, any investment decision and the associated risk remains with the investor.

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