Tech Stocks Retreat as Geopolitical and Rate Fears Resurface

The Nasdaq 100 index faced its most challenging trading session in two months, pressured by a potent combination of rising bond yields and renewed geopolitical tensions. This shift in sentiment has driven investors toward defensive assets, with market participants showing a clear decline in risk appetite as major technology stocks come under pressure.

A significant factor behind the market's downturn is a sharp move in the bond market. The yield on the benchmark 10-year U.S. Treasury note climbed to 4.30%, reaching its highest level since September. This jump in interest rates places particular strain on high-valuation technology stocks, as it discounts the present value of their future earnings and makes fixed-income alternatives more appealing.

Compounding the pressure from rates, a fresh geopolitical development has unsettled investors. Reports indicate the White House has issued a new ultimatum, threatening to impose 10% tariffs on eight NATO countries starting February 1, linked to negotiations concerning Greenland. This news fueled market uncertainty, sending the CBOE Volatility Index (VIX) to its highest point since late November.

Sector Performance Shows Divergence

The sell-off was notably concentrated in the technology and semiconductor sectors. Shares of Nvidia declined approximately 3.5% during the session, weighed down by concerns that escalating trade conflicts could disrupt global supply chains. Broadcom and Taiwan Semiconductor Manufacturing Company (TSMC) also registered significant losses.

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

Amid the broad market weakness, several assets stood out with positive performance:
* Walmart: The retail giant's stock found support and briefly touched a record high following its official inclusion in the Nasdaq 100 index. The move triggered mandatory buying by index-tracking funds.
* Netflix: Shares held firmly in positive territory. Investors reacted favorably to news of the company's planned acquisition of Warner Bros. Discovery. The all-cash transaction, valued at $82.7 billion, alleviated concerns about potential share dilution.
* Gold: The precious metal served as a classic safe-haven asset, climbing to a new record high above $4,730 per ounce.

Technical Picture Deteriorates

From a chart perspective, the selling pressure has damaged the short-term technical outlook. The Nasdaq 100 broke below a key support zone at 23,400 points. Bears are now testing the 23,100 level. A daily close beneath this threshold could pave the way for a test of the index's 50-day moving average. The elevated trading volume accompanying the decline suggests institutional selling activity rather than retail investor panic, underscoring the seriousness of the downward move.

Traders are now focused on the session's closing level. A failure to defend the 23,100 mark may invite further selling pressure during Asian and European trading hours. In the near term, market participants will also await additional details on the Netflix acquisition. However, the primary driver for future market direction remains geopolitical rhetoric. Any de-escalation in trade tariff threats could, given the velocity of today's sell-off, quickly trigger a sharp rebound.