Tech Sector Holds Its Breath Ahead of Nvidia Earnings Report

Market participants are exhibiting extreme caution as the technology-heavy NASDAQ 100 faces a pivotal test. The index has recorded losses in five of the last six trading sessions, breaching its critical 50-day moving average. All attention now focuses squarely on a single event: Nvidia's quarterly earnings release after today's market close. The outcome will determine whether the AI chip leader can resuscitate the faltering tech rally or trigger another wave of selling pressure.

From a chart perspective, the NASDAQ 100 stands at a critical juncture. For the first time since May, the benchmark is trading below its 50-day moving average—a traditional bearish signal. More concerning still, just 36.27% of index components currently trade above this short-term trend indicator. The next significant support level awaits between 24,080 and 23,970 points. Meanwhile, the RSI indicator remains below the neutral 50 mark, suggesting persistent selling pressure. A disappointing report from Nvidia could quickly test this support zone.

Pre-Market Activity Shows Tentative Stability

NASDAQ 100 futures indicated slight upward movement Wednesday morning, pointing to fragile recovery attempts. With a modest gain of approximately 0.07%, markets signaled a potential breather following Tuesday's 1.20% decline. The popular QQQ ETF similarly climbed 0.24% in pre-market trading. Despite these early gains, underlying tension remains palpable. The VIX volatility index, Wall Street's fear gauge, had surged significantly the previous day. Investors are positioning themselves cautiously ahead of the 3:30 PM CET market opening, fully aware that the true directional decision will only emerge after the closing bell.

Should investors sell immediately? Or is it worth buying NASDAQ 100?

Sector-Wide Weakness Emerges

The recent downturn has impacted the entire technology landscape. During Tuesday's session, Amazon plunged over 4% and Microsoft shed more than 2%, with both moves following analyst downgrades. Semiconductor stocks suffered particularly heavy losses, with Marvell Technology and Micron each tumbling more than 5%. This broad-based selling activity suggests potential sector rotation may be underway. Investors appear to be withdrawing from highly-valued growth stocks and reallocating toward more defensive positions. The crucial question remains whether this represents a healthy market correction or the beginning of a more significant trend reversal.

Nvidia Carries Sector Hopes

The pre-market stabilization appears deceptive. While Nvidia shares showed modest recovery with a 0.51% gain, Wall Street anxiously awaits the AI pioneer's financial results and, most importantly, its forward guidance. A strong report could inject fresh momentum across the technology sector and bring bullish investors back to the forefront. Conversely, disappointing figures would likely accelerate the downward trend and trigger further profit-taking across tech valuations. The entire technology universe now watches and waits as Nvidia prepares to report.