Nasdaq 100 dips 1% as tech stocks struggle on Monday

The Nasdaq 100 experienced a decline of 1% on Monday, primarily driven by a downturn in semiconductor stocks and disappointing earnings from PDD Holdings. This drop erased the gains made the previous Friday, when the index had surged following comments from Fed Chair Jerome Powell regarding potential rate cuts. The tech-heavy index had previously risen over 14% since its lows in August, indicating a cooling of risk sentiment among investors. Investors adopted a cautious approach towards semiconductor stocks ahead of Nvidia's upcoming earnings report, which is highly anticipated and set to be released on Wednesday. The iShares Semiconductor ETF, which tracks a basket of chipmakers, fell by 2.5%, failing to maintain its position above the 200-day moving average. Given that semiconductor stocks constitute nearly a quarter of the Nasdaq 100's portfolio, their decline significantly impacted the index's performance. Additionally, PDD Holdings, a major Chinese retail company, saw its stock plummet by 28.5% due to poor earnings results, further dragging down the Nasdaq 100. This contributed an additional 0.25 percentage points to the index's decline. Other notable contributors to the negative performance included Broadcom, NVIDIA, Tesla, and Microsoft, all of which experienced declines in their stock prices. Overall, the combination of these factors led to a challenging day for tech stocks, as the Nasdaq 100 tested its 50-day moving average support, reflecting the ongoing volatility in the technology sector.