US stock futures traded higher with Nasdaq (QQQ) also turning positive following the release of today’s closely watched non-farm payrolls report, while European indices rallied across the board. Still, US investors were understandably reluctant to make big bets before the long weekend. The employment figures were weaker than expected, and that reduced expectations for Federal Reserve policy tightening. This was met with a positive reaction in the equity markets. But let’s see if the positive will hold as we head deeper into the US session.
Jobs data misses expectations
The June NFP reading was the main event on the US economic calendar today. The headline jobs number came in well below the consensus of +115K, at just +57K, and the previous month was revised lower too. Though the unemployment rate fell to 4.2%, this was partly driven by a drop in the participation rate. The stock market liked the data, and the dollar hated it because it effectively rules out the chances of a July rate hike from the Fed – not that this was going to happen anyway with oil prices falling.
Keep an eye on tech stocks
Technology stocks will remain in focus after they 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 (MU) and SanDisk both suffered double-digit declines on Wednesday, while Nvidia (NVDA) and Broadcom (AVGO) also moved lower. The weakness spread into Asian trading overnight, with Samsung Electronics (SSNLF) and SK Hynix dragging South Korea’s Kospi sharply lower. Similar selling pressure was evident across several technology stocks in China and Hong Kong. Here’s a list of the biggest premarket movers today.
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 (AAPL) 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.
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 to 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 intensify.
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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