The Nasdaq 100 kicked off the week on a sour note, falling by 1% on Monday. This decline erased the gains made the previous Friday when the index rallied following Federal Reserve Chair Jerome Powell’s suggestion of a potential rate cut during his speech at Jackson Hole. However, Monday brought no significant news or economic data directly affecting tech stocks, hinting at a cooling of risk sentiment after the tech-heavy index had surged over 14% since its August lows.
Two key factors weighed down the Nasdaq 100 on Monday, as tracked by the Invesco QQQ Trust (QQQ): the decline in semiconductor stocks and the sharp plunge in PDD Holdings Inc (PDD). Investors took a cautious approach to semiconductor stocks ahead of the eagerly anticipated earnings report from Nvidia Corp (NVDA), scheduled for release Wednesday after the market closes. A basket of chipmaker stocks, tracked by the iShares Semiconductor ETF (SOXX), dropped 2.5% on Monday, failing to hold above its 200-day moving average. Since semiconductor stocks represent nearly a quarter of the Nasdaq 100’s portfolio, they alone contributed to a 0.7 percentage point drop in the index’s performance for the day.
The other significant drag on the index was the Chinese retail giant PDD Holdings. The company plummeted by 28.5% on disappointing earnings results, further pulling down the Nasdaq 100 by an additional 0.25 percentage points.
Here’s a breakdown of the top negative performance contributors to the Nasdaq 100 on Monday:
| Company | Weight (%) | 1-day return (%) | Contribution (pp) |
|—|—|—|—|
| PDD Holdings Inc. | 0.62 | -28.52 | -0.25 |
| Broadcom Inc. (AVGO) | 5.15 | -4.03 | -0.21 |
| NVIDIA Corporation (NVDA) | 8.24 | -2.26 | -0.19 |
| Tesla, Inc. (TSLA) | 2.75 | -3.22 | -0.09 |
| Microsoft Corp. (MSFT) | 4.76 | -1.3 | -0.06 |
This decline brought tech stocks to their 50-day moving average support level. The performance of these key players will continue to be closely watched in the coming days as the market assesses the overall health of the tech sector.
