Will the Nasdaq Crash Drag the Markets to a New Low?

Speculation surrounding tariffs continues to dominate the markets, spreading turmoil and uncertainty regarding duties. Fear and caution will remain prevalent until the tariffs are either imposed or postponed on April 2. A potential delay or a shift in tariff conditions towards easing for the European Union would provide fresh momentum for index and stock purchases. However, for now, position closures to reduce risk exposure will continue to dominate the markets.

Nasdaq – From a technical perspective, the sentiment indicates high caution and a transition to larger cash exposures. A classic corrective flag formation is developing, the triggering of which would drive the movement to test the local low around 19,100, and if breached, the formation’s completion could lead quotations to levels of 18,600. A key zone to monitor for a breakout is the 19,830 level (23.6% Fibonacci retracement, correction zone for the pattern breakout, and horizontal support). The price action at the close of the daily candle would outline the direction of the next move. A close around the current levels within the support zone suggests a potential breakout in tomorrow’s session, leading to further sell-offs before the week’s end.

Alternatively, a rebound from support could halt the panic-driven sell-offs and initiate a search for a new price direction.

The technology sector is leading the decline, negatively impacting other indices as well. The S&P 500 is down 0.8%, while the Dow Jones Industrial Average drops 42 points, or 0.1%. Meanwhile, the tech-heavy Nasdaq Composite plunges nearly 1.7%.

Nvidia’s stock is down more than 5.5%, while Tesla loses around 5%. Shares of Alphabet, Amazon, and Meta also decline by more than 1%.

Wall Street is closely watching for signs indicating a potential rise in inflation and an economic slowdown, as investors continue to analyze President Donald Trump’s mixed messages regarding tariffs ahead of the scheduled April 2 start date for reciprocal duties.

Stocks declined further during the midday trading session after Bloomberg News reported that Trump was preparing to make an announcement on auto tariffs as early as Wednesday, ahead of his broader tariff plans set for next week, citing sources familiar with the matter.

On Tuesday, Trump stated that the tariffs would likely be “softer than reciprocal,” reflecting a more lenient stance. This added to earlier reports from the week suggesting that tariffs might be narrower in scope and that sector-specific tariffs could potentially be postponed.

Additionally, the March consumer confidence data revealed that Americans’ outlook on income, business, and job prospects has fallen to its lowest level in 12 years, exerting further pressure on the already negative market sentiment.