So much for the fireworks in the Nasdaq.
Earlier today, I highlighted the potential for a Fourth of July, America’s 250th anniversary rally, as both the S&P 500 and Nasdaq were flashing bullish technical signals. The S&P was pulling away from its 200-hour moving average near 7471.61, while the Nasdaq had pushed above its own 200-hour moving average at 26211, suggesting buyers were gaining momentum.
Traders initially welcomed signs of a cooling labor market, fueling expectations that the Fed will remain on hold. At the same time, oil prices fell back to their lowest levels since February 27, reinforcing the view that inflation pressures could continue to ease in the months ahead.
However, that optimism has quickly faded. Part of the shift may stem from reports yesterday that Meta Platforms is looking to sell some of its excess AI computing capacity—a development that has raised questions about AI-related demand and prompted investors to reassess the sector’s lofty expectations.
- Nvidia -1.85%
- Micron -4.87%
- Marvell Technologies -8.30%
- Intel -3.87%
- Broadcom -1.79%
- AMD -4.25%
- Sandisk -10.83%
- Cisco -3.56%
- Nebius -7.43%
- Cerebras -5.21%
- Dell -7.16%
- GE Vernova -2.19%
Ouch.
So instead, sellers (AI) crashed the celebration.
The Nasdaq reversed sharply from its session high of 26261.09 and has fallen decisively into negative territory. The index is now down 192 points (-0.74%) at 25848.23, representing a swing of more than 410 points from the day’s high.
From a technical perspective, the reversal is significant. The index has fallen back below both its 200-hour moving average (26211.12) and its 100-hour moving average (25967.07). Trading near 25833, the Nasdaq sits roughly 130 points below the 100-hour moving average, putting sellers firmly back in control. For buyers to regain the upper hand, they first need to reclaim the 100-hour moving average and then retake the more important 200-hour moving average.
The S&P 500 is holding up better, but it is now fighting its own technical battle. The index continues to straddle its 200-hour moving average at 7471, with buyers trying to defend that key support. Holding above the level would preserve the near-term bullish bias. A sustained break below, however, would shift attention toward the 100-hour moving average at 7447.28.
It appears the stock market’s Independence Day celebration has been postponed. The fireworks fizzled before the finale, and unless buyers can quickly regroup, this holiday rally may end with a whimper rather than a bang. Maybe investors will have to save their patriotic cheers for the U.S. soccer team’s World Cup matchup against Belgium on Monday.
