The Nasdaq 100 index sell-off persisted on Monday as US bond yields continued rallying. The tech-heavy index declined by over 300 points, pushing it to a correction territory. Other indices like the Dow Jones and S&P 500 declined as investors worried about the tightening by the Federal Reserve. Analysts believe that the Fed will start winding down its pandemic-era actions like low interest rates this quarter. Some of the worst performing tech companies were SoFi Technologies, Robinhood Markets, Bumble, Etsy, and PagerDuty among others.
The biggest announcement in corporate America came from Take Two Interactive, the company behind games like Grand Theft Auto and Midnight Suns. The firm announced that it would acquire Zynga, the company known for Farmville and Zynga Poker in a $12 billion deal. The purchase price is a 64% premium for the company. Activity in the game industry has been high recently. Microsoft acquired Doom in a $7.5 billion deal while Electronic Arts bought Glu Mobile. Later this week, focus will be on corporate earnings.
The US dollar index rose by 0.30% in the overnight session as investors continue assessing the recent economic data from the United States. Data showed that the labor market is still going strong in the country as the unemployment rate declined to 3.9%. Later today, the currency will react to a testimony by Jerome Powell, who will likely provide more guidance on the state of the economy and potential actions. Other Fed members who will speak include Loretta Mester and Esther George.
The four-hour chart shows that the Nasdaq 100 index has been in a strong bearish trend in the past few weeks. Any attempts to buy the dips have all failed. The index also managed to move below the key support at $15,505, which was the lowest level on December 20th. It also slumped below the 25-day and 50-day moving averages. Also, the index moved to the lower side of the Bollinger Bands while the Average True Range (ATR) jumped to the highest level since December. Therefore, the index will likely keep falling this week