The US Nasdaq 100 index of the top tech stocks suffered a strongly bearish week and could fall further.
NASDAQ 100 – Weekly Chart
The NAS 100 saw its sharpest weekly drop since April and has correction potential to 18,420.
Technology stocks in the United States have driven the entire stock market due to excitement over artificial technology. Chip stocks like Nvidia were the first beneficiaries of the AI hype and are now testing the bull market.
Dutch chipmaker ASML fell more than 16% in the week after the Biden administration said it would impose the highest sanctions on companies selling high-end chips to China.
The drop in the Nasdaq has also affected the price of Microsoft and Apple, with the two seeing all-time highs this year.
Some bargain-hunting investors will see this sell-off as an opportunity to buy the dip. However, caution would be advised after valuations soared to records on hype over a technology that has not delivered.
The so-called Magnificent Seven stocks were lower, with Amazon down around -6 % and Meta Platforms down -4.2% for the week. If institutional investors want to take profits, investors will be on guard for further capitulation.
Another hit to tech stocks came last week after an IT outage led to delays in air travel and other businesses.
In a statement, Microsoft blamed a “third party” for the problems impacting its systems worldwide. The tech giant said: “We’re aware of an issue affecting Windows devices due to an update from a third-party software platform. We anticipate a resolution is forthcoming.”
Cybersecurity stocks were higher after the event but could not outweigh the bearishness on the day.
