NASDAQ ‘Technical Bounce’ Fails to Overcome Rate Hike Driven Selling Pressure

The tech-weighted NASDAQ Composite is trading lower shortly after the mid-session on Monday. The index tested a one-month low earlier in the session before clawing back more than half of that loss. The selling pressure is being fueled as investors worried about the Federal Reserve’s plan to keep raising interest rates in its fight against inflation even at the cost of an economic slowdown.

Today’s rebound rally is likely being driven by oversold technical conditions, a slight dip in U.S. Treasury yields from a steep price earlier in the session and a weaker U.S. Dollar.

At 18:20 GMT, the NASDAQ Composite is at 12058.12, down 83.49 or -0.69%. The Invesco QQQ Trust is trading $305.50, down $1.94 or -0.63%.

The technology-driven index fell sharply on Friday after Federal Reserve Chairman Jerome Powell’s short and blunt remarks in Jackson Hole, Wyoming, appeared to extinguish hopes of the central bank changing its aggressive course of rate hikes in the months ahead.

NASDAQ Composite Stocks on the Move

Pinduoduo surged 18% after topping estimates in the recent quarter on the top and bottom lines. The China-based e-commerce giant said a recovery in consumer sentiment helped results.

Shares of the streaming giant Netflix are up about 1.1% after a Bloomberg report showed that its ad tier could cost between $7 and $9 a month.

Etsy added 1.2% following news that it will require U.S. sellers on its platform to verify their bank accounts or provide their username and password to fintech platform Plaid.

Short-Term Outlook

Volume is extremely low as we approach Friday’s U.S. Non-Farm Payrolls report and the start of a long U.S. holiday weekend. With most of the major players expected to start moving to the sidelines, volume could continue to drop further, setting up the possibility of extremely volatile price swings that mean absolutely nothing to the near-term structure of the market.

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A California owner of a Tesla Model 3 sued the electric vehicle maker in a proposed class action over cars suddenly stopping for non-existent obstacles, calling it a “frightening and dangerous nightmare,” according to the lawsuit.