Trading activity on Thursday revealed a clear shift in investor sentiment ahead of crucial U.S. employment data. The Nasdaq 100 index closed the session 0.57% lower at 25,507 points, pressured by a pullback from semiconductor holdings. Concurrently, a notable rotation into defense contractors emerged following an announcement from President-elect Trump regarding a substantial proposed military budget.
Sector Rotation Defines Session
Capital moved decisively out of high-valuation technology shares and into more defensive industrial names. The index’s heaviest weight, Nvidia, contributed significant downward pressure, shedding 2.17% to close at $185.04. Other chipmakers also faced selling, with Micron Technology declining 3.40% and cybersecurity firm CrowdStrike dropping 3.46%.
Alphabet provided a bright spot, advancing 1.5%. This gain propelled the company past Apple in terms of market capitalization, establishing it as the world’s second most valuable corporation. The most dramatic moves, however, were seen in the defense sector. Shares of Kratos Defense skyrocketed 13.78% after Trump outlined a prospective $1.5 trillion defense spending plan.
Market participation was subdued, with total volume of 320.9 million shares trading roughly 12% below the three-month average—a signal of investor caution preceding the jobs report.
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Technical and Macroeconomic Backdrop
From a chart perspective, the index is consolidating within its prevailing uptrend. Initial support around the 25,400 level held firm, with the next key technical level seen at the 50-day moving average of 25,391 points. The Relative Strength Index (RSI) has retreated from overbought territory, indicating potential for price movement in either direction.
Adding to the pressure on growth-oriented technology stocks was a continued climb in benchmark interest rates. The yield on the 10-year U.S. Treasury note rose to 4.18%, making future earnings from high-growth companies less attractive by comparison.
All Eyes on the Friday Release
The market’s immediate focus is squarely on the Non-Farm Payrolls report, scheduled for release Friday at 2:30 PM German time. Economists anticipate the addition of approximately 55,000 new jobs, with the unemployment rate holding at 4.5%. A figure significantly stronger than forecast could drive bond yields higher and further weigh on the Nasdaq. A result in line with expectations would likely redirect attention to the upcoming corporate earnings season. Reflecting the pre-report anxiety, Nasdaq 100 futures were trading 0.2% lower in early Friday activity.
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