Nasdaq 100, Federal Reserve, Apple, Tesla, Adobe, FAANG – Talking Points
Nasdaq 100 falls roughly 2.5%, largest single day fall since SeptemberApple shares plunge almost 4%, Tesla sheds more than 5% in routNvidia, AMD both fall by more than 5% as chipmakers get hit hard
The Nasdaq suffered its largest single day decline since September as market participants digested yesterday’s Federal Reserve policy statement. Tech giants such as Apple, Tesla and Adobe tumbled lower while chipmakers also took a beating. As markets digest the reality of future rate hikes, market participants may continue to reallocate into more cyclical-oriented positions. That theme was alive and well on Thursday, with financials and utilities some of the biggest gainers.
Thursday’s decline puts the Nasdaq 100 Index down roughly 3% on the week, with a notable close right at the 50-day moving average. The index gave back all of the gains from Wednesday’s session, worryingly forming a bearish engulfing candle. With heavyweight names under some serious pressure, the Nasdaq 100 Index could yet come under more pressure. The heavy lifting FAANG names coming under pressure may worry investors, given recent market breadth. Only 28% of Nasdaq 100 constituents find themselves currently trading above their respective 200-day moving average.
Nasdaq 100 Index Daily Chart
Chart created with TradingView
There were some notable large decliners during Thursday’s session, perhaps none more apparent than Adobe, which fell more than 10% after the company guided lower for upcoming fiscal quarters. Tesla, the darling of the retail crowd, fell over 5% during trade. There was some serious pain among chipmakers, with Nvidia and AMD falling 6.8% and 5.4%, respectively.
Traders may be in for more volatility on Friday, as it represents a “quadruple (quad) witching” date. Quad witching occurs just four times per year (hence the name), and it represents when stock index futures, stock index options, stock options, and single stock futures all expire on the same date. Historically, these sessions are marked by significant upticks in volume as traders look to either close out existing positions or roll positions over into new contracts. Quad witching occurs on the third Friday of March, June, September, and December.
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— Written by Brendan Fagan, Intern
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element inside the element. This is probably not what you meant to do!