As a result of the rising bearish sentiment in the stock market, technology stocks continue to endure periods of weakness.
On the whole, the vast bulk of tech stocks are down in the premarket on Tuesday, January 25, prior to the market opening. Notably, several of the most active companies, such as Tesla (NASDAQ: TSLA), Apple (NASDAQ: AAPL), and NVIDIA (NASDAQ: NVDA), have all seen the highest trading volume premarket, have all witnessed a decline in value premarket.
Bill.com (NYSE: BILL), which saw the most significant change, is down 3.84% at the time of publication, followed by Chargepoint (NYSE: CHPT), which is down 3.32%, NVIDIA, which is third with 2.88%, and coronavirus vaccine-related company Moderna (NASDAQ: MRNA), which is fourth with a decrease of 2.54%, according to Market Watch premarket data.
Indeed, when looking at the big tech stock price declines from their respective three-month highs as of January 24, Amazon (NASDAQ: AMZN) has fallen the most, down 21.8%, followed by Microsoft (NASDAQ: MSFT), down 13.6%. Alphabet (NASDAQ: GOOGL) is third with 13.5%, and together both down 11.2% is Apple, and Meta Inc. (NASDAQ: FB), formerly Facebook.
Regarding the decline in value premarket, former hedge fund manager, Jim Cramer, said that he would like to see a sell-off in the morning and a recovery as the day progresses rather than things looking better in the morning and then worse later in the session.
Markets are flirting with a correction
Recently, we reported that the market is flirting with a correction based on a number of mitigating circumstances, such as the Federal Reserve hinting at tighter monetary policy returning in December, which later in January, they informed they would be returning quicker and more widely than anticipated.
Rising geopolitical tensions are also affecting markets as the likelihood of a potential invasion of Ukraine by Russian forces is causing a great deal of uncertainty. Additionally, there are hints of a slowdown in the US economy as a result of the rapid spread of the Omicron variant.
Nasdaq sentiment lower than March 2020 crash
Finbold also highlighted that the current sentiment on the Nasdaq equity market is weaker than that of the crash that occurred in March 2020, when the coronavirus pandemic started to have an impact on global markets.
Founder and Managing Partner of Fairlead Strategies, LLC, Katie Stockton, said:
“For the S&P 500 and the Nasdaq 100, the damage is really already done from a technical perspective. Those breakdowns are only short-term in nature; they’ve already been confirmed; the market internal measures things like breadth, leadership, a sentiment. They’re all very over-sold here.”
On the current market volatility, she added:
“Even a very strong relief rally for the Nasdaq 100 wouldn’t fix the damage that’s been done. There’s about 3.5% room right now to the 200-day moving average that we could certainly see in terms of a magnitude for the bounce, and a lot of people would welcome that as we watch these mega-caps go against them and underperform.”
Investors appear to be watching the performance of the market closer than ever this week to see how things play out, as the Nasdaq is still down 14.5% from its all-time high and the Nasdaq 100 is roughly down 13.5% from its all-time high respectively.
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