Tech Stocks Face Mounting Pressure as NASDAQ 100 Tests Critical Support

The NASDAQ 100 concluded Friday's trading session in negative territory, wrapping up a volatile week for technology shares. Closing at 25,059.81 points, the index registered a 0.28 percent decline amid persistent valuation concerns within the artificial intelligence sector and growing apprehensions about a cooling U.S. labor market.

Throughout Friday's session, the technology-focused index navigated a wide trading range between 24,603.78 and 25,065.14 points. Selling pressure intensified during the early afternoon, pushing the index to its daily low as heavyweight components faced significant downward momentum. Although a late-session recovery partially offset earlier losses, the index ultimately failed to break into positive ground.

Trading volume remained below average while market breadth tilted decidedly negative, with declining issues outnumbering advancers by a ratio of 2.69 to 1. Market volatility saw a notable increase, with the VIX volatility index climbing 8.3 percent to reach 19.50 points.

Sector Performance and Key Drivers

Technology and consumer cyclical sectors bore the brunt of the selling pressure, registering declines of 2.0 percent and 2.3 percent respectively. High-flying artificial intelligence stocks faced particular scrutiny from investors:

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

• Nvidia and Microsoft experienced noticeable selling activity
• AMD and Palantir contributed to the downward momentum
• Investors engaged in profit-taking while questioning extended valuations

The ongoing U.S. government shutdown compounded market uncertainty, leaving investors dependent on private economic indicators in the absence of official government data.

Technical Outlook and Critical Levels

From a technical perspective, the NASDAQ 100 is currently testing a crucial support zone around the 25,000-point threshold. A decisive break below this level could trigger additional declines toward the 50-day moving average at 24,600 points.

• Support levels: 25,000 points, followed by 24,600 points
• Resistance levels: 25,200 points, 25,500 points, 25,700 points
• Momentum indicators: RSI shows negative divergence, indicating weakening buying momentum

Market Sentiment and Forward Outlook

Traders displayed cautious positioning, reflected in a put/call ratio of 1.08. While the Dow Jones Industrial Average posted modest gains, the NASDAQ 100's performance signaled clear risk aversion among market participants.

The central question facing investors is whether technology stocks are experiencing a healthy consolidation phase or the beginning of a more substantial correction. The coming week's trading action is expected to provide clearer direction for the sector's near-term trajectory.