Yesterday, equity indices finished mixed. The S&P 500 rose by 0.41%, the Nasdaq 100 slipped by 0.09%, and the Dow Jones Industrial Average jumped by 1.73%.
The technology sector extended its pullback from record highs, the third day in a row. Nasdaq 100 futures are down about 0.9%, and the MSCI Asia index has lost 1.4%. The biggest hit again fell on South Korea's KOSPI, this year's top performing index and a key gauge of AI investment, down 4.7%. This is no longer a mere technical correction but represents large capital exiting positions accumulated during months of rapid gains.
The trigger was Broadcom — the stock fell the most in 16 months after a disappointing revenue guide for AI chips. Investor expectations had been too high, and management signaled that the shift toward AI customers is progressing more slowly than anticipated. Union Bancaire Privee described the move yesterday as predictable: after unprecedented gains, consolidation was overdue, and Broadcom's miss gave profit-holders an excuse to lock in gains — but the long-term AI thesis remains intact. A correction following a roughly 70% rally in the Philadelphia Semiconductor Index over two months is normal market behavior, not necessarily a trend reversal.
Brent crude recovered modestly to about $95.50, partially retracing losses after the Lebanon-Israel ceasefire news. Gold eased to $4,440 — uncertainty around US-Iran talks continues to weigh. San Francisco Fed President Mary Daly said yesterday that policy is in a good place but that there is too much uncertainty ahead to offer clear guidance.
The main event today is Friday's nonfarm payrolls data. Consensus calls for +85,000 jobs and a 4.3% unemployment rate. If the print comes in materially stronger than expected, markets will increase the odds of Fed rate hikes, which would put additional pressure on the tech sector via the yield channel.
Technically, the S&P 500 analysis shows that the immediate task for buyers is to overcome the resistance level of $7,547. Doing so would confirm upside and open the path to $7,574. Maintaining control above $7,607 would further strengthen buyers' positions. On the downside, buyers need to defend $7,518. A break below that level would likely push the index back to $7,494 and open the way to $7,474.