Wall Street Extends Losses Amid Tech Selloff, Policy Uncertainty; NFP in Focus

Key Takeaways:

• Major indices fell for a second straight session as profit-taking and tech sector weakness weighed on sentiment.

• Googles partial win in its antitrust case is seen as a positive for Big Tech, potentially supporting a tech rebound.

• Markets eye Fridays NFP report and Congresss budget talks, which could influence both Fed policy expectations and investor sentiment.

Market Summary:

U.S. equities declined for a second straight session as September trading commenced, weighed down by broad-based profit-taking and notable weakness in the technology sector. The pullback reflected heightened investor caution amid lingering policy uncertainty from the White House and positioning ahead of Fridays pivotal U.S. employment report.

The August Nonfarm Payrolls (NFP) data, due Friday morning, is widely anticipated to serve as a critical input for the Federal Reserves upcoming September 17 policy decision. A stronger-than-expected print could reinforce expectations that the Fed will delay rate cuts, potentially extending equity market volatility, while a softer report may bolster the case for easing and support a rebound in risk assets.

Amid the broader retreat, the technology sector is poised to find support from a favorable legal development for Google. A federal judge ruled that the company will not be forced to divest its Chrome browser as part of an ongoing antitrust case, though it will be required to share certain search data with competitors. The decision is perceived as a relative victory for large-cap tech firms and may help temper recent sector-specific selling pressure.

Meanwhile, the return of Congress from a six-week recess is drawing market attention, with lawmakers facing a tight timeline to pass legislation funding the federal government and avoid a shutdown. Constructive progress on budgetary negotiations could alleviate one source of near-term political uncertainty and contribute to stabilizing market sentiment.

Technical Analysis

NASDAQ, H4:

The Nasdaq Composite Index, after trading with pronounced bearish momentum and testing the critical psychological support level near 23,000, has managed to stage a technical rebound. The recovery was significant enough for the index to break above its recent downtrend channel, hinting at a potential near-term trend reversal.

For this bullish signal to gain conviction, the index must sustain trading above its newly established support level near the 23,300 mark. A successful defense of this zone would help solidify the shift in near-term structure and could attract further buying interest.

Momentum indicators, however, have yet to fully confirm the positive price action. The Relative Strength Index (RSI), while having avoided a deep fall into oversold territory, remains at subdued levels, reflecting residual selling pressure. Similarly, the Moving Average Convergence Divergence (MACD) continues to fluctuate near its zero line, failing to provide a decisive bullish crossover. This divergence suggests that while selling pressure may have eased, underlying momentum remains neutral to cautiously bearish.

Resistance Levels: 23,480.00, 23,685.00

Support Levels: 23,015.00, 22,755.00