Nasdaq Index Forecast: Tech Selloff Deepens as Nvidia, Broadcom Lead Losses

U.S. Stock Futures Drop as Tech Sector Stays Under Pressure

U.S. stock futures fell on Wednesday following a sharp decline in major indices, with the S&P 500 experiencing its worst day since early August. The drop comes as concerns about slowing economic growth and weakness in tech stocks dominate market sentiment. On Tuesday, the Dow Jones Industrial Average lost over 600 points, down 1.5%, while the S&P 500 slid 2.1%, and the tech-heavy Nasdaq Composite dropped 3.3%.

At 12:46 GMT, Dow futures are trading 40942.00, down 76.00 or -0.19%. S&P 500 Index futures are at 5518.00, down 23.75 or -0.43% and Nasdaq-100 Index futures are trading $18861.00, down 145.50 or -0.77%.

Tech Stocks Face Continued Selloff

Tech stocks continued to struggle in premarket trading Wednesday, compounding losses from the previous session. Nvidia shares dropped more than 2% in premarket trading, following a Bloomberg report that the company had received subpoenas from the U.S. Department of Justice as part of an antitrust investigation. Nvidia, which fell nearly 10% on Tuesday, has been one of the leading names in the semiconductor sector’s recent slide.

Other chipmakers, including Broadcom, Marvell Technology, and Qualcomm, also saw declines of approximately 1% each in early trading. The VanEck Semiconductor ETF dropped 1.4% before the bell.

Dollar Tree Faces Pressure After Slashing Guidance

Dollar Tree shares tumbled more than 11% in premarket trading after the company cut its earnings and revenue forecasts for the year. The discount retailer now expects adjusted earnings between $5.20 and $5.60 per share, down from the prior range of $6.50 to $7. Dollar Tree’s second-quarter revenue of $7.37 billion also missed analyst expectations of $7.49 billion.

This follows a similar miss by Dollar General last week, which saw its stock drop 25% on weak earnings and lowered guidance. Other discount retailers, including Dollar General and Five Below, followed suit with declines of 2% and 1.7%, respectively.

Dick’s Sporting Goods Exceeds Expectations, But Guidance Falls Short

Dick’s Sporting Goods reported better-than-expected second-quarter results, with earnings per share of $4.37 beating estimates of $3.83. Revenue for the quarter came in at $3.47 billion, also slightly ahead of expectations. However, the retailer’s updated guidance for fiscal 2024 fell flat, raising concerns about consumer spending in the coming months. Dick’s raised its earnings outlook only slightly, projecting full-year earnings between $13.55 and $13.90 per share, just below the $13.79 anticipated by analysts. The company’s revenue forecast for the year remained unchanged at $13.1 billion to $13.2 billion.

Oil Volatile on Speculation Over OPEC+ Production Plans

U.S. crude oil prices are down, but attempting to rebound from recent nine-month lows. The recovery comes amid speculation that OPEC+ may delay a planned production increase set for October. Oil prices have faced downward pressure due to weak manufacturing data from the U.S. and China, raising concerns about a global economic slowdown. Brent crude, the international benchmark, has erased all of its 2024 gains, though analysts at UBS remain optimistic, predicting that prices could recover to $80 per barrel in the coming months.

Market Forecast: Short-Term Caution Amid Volatility

With September historically being a weak month for equities, traders should brace for continued volatility. While the recent sell-off in tech and retail stocks suggests further downside risk, some investors view the pullback as a buying opportunity. Economic uncertainties and upcoming political events could weigh on consumer spending, but sectors like energy may see a rebound if OPEC+ opts to delay production increases. In the short term, caution is advised, but selective buying opportunities could emerge if valuations continue to decline.

Technical Analysis

With the tech-heavy market well below the pivot at 19167.50 and the 50-day moving average at $19593.97, investor focus has shifted to the 200-day moving average at 18532.04 and the longer-term retracement zone at 17858.50 to 17198.25.