Weakness in tech stocks is weighing on the index; the US midterms and developments involving Iran could increase volatility.
What is weighing on the Nasdaq
Recent pressure has been concentrated mainly in technology and semiconductor stocks. Investors are reassessing how long it may take for massive investments in artificial intelligence to pay off. Actual demand, profitability, and the ability to finance data centers and infrastructure are all in focus. Sharp swings in Marvell and Lumentum following the announcement of a major merger, along with selling in other tech names, have added to sector jitters.
Geopolitical signals are mixed. Hopes for progress in US-Iran talks helped drive oil sharply lower on Monday, potentially easing inflation expectations. However, reports of limited US strikes in the Strait of Hormuz area and uncertainty surrounding the negotiations keep the risk of further swings in energy prices and markets elevated. For the Nasdaq, lower oil prices could ease pressure on interest rates, while an escalation could bring inflation concerns and risk aversion back to the forefront.
Midterms: the impact will depend mainly on policy
The US elections are taking place today, November 3. At the time the sources were checked, results were not yet available: the first polling stations are expected to close from 6:00 p.m. Eastern Time. Investors are watching the results for potential implications for AI regulation, federal spending, the deficit, and fiscal policy. Reuters notes that a Democratic win in the House could lead to greater scrutiny and investigations of tech companies; a divided Congress, meanwhile, could revive the risk of a budget impasse. These are policy scenarios, not certain immediate effects on market prices.
The market reaction will likely depend more on the details and perceptions of fiscal stability than on the political makeup of the result alone. A contested outcome or prolonged uncertainty could increase volatility, while a clear transition could shift attention back to earnings, yields, and AI investment.
Technical and fundamental outlook
Official Nasdaq data show an intraday high of 28,753.39 and a low of 28,054.72 on November 2. The close near the session low suggests selling pressure remained significant through the end of the day. The 28,050–28,000 area is therefore a nearby reference to watch, though it should not be treated as guaranteed support. A sustained break below it could extend the correction; a move back above 28,750 would be an initial sign of stabilization, subject to confirmation from semiconductor stocks and major growth names.
Base case: elevated volatility and attempts to stabilize, with risks still tilted to the downside until the Nasdaq regains its near-term resistance levels and selling in chip stocks eases. Lower oil prices and a prompt resolution of the election outcome could support a rebound. Renewed tensions with Iran, rising yields, or further doubts about AI profitability could reignite selling.
Disclaimer: This analysis is for informational purposes only. It is not personalized financial advice or a recommendation to invest. Markets can move rapidly; futures and CFDs carry significant risks, including the effects of leverage.
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