Nasdaq breaks below 25,000 as Nvidia drops 5%, tech selloff deepens

The Nasdaq Composite fell below 25,000 points for the first time since May, dropping 0.46% to 24,861.26, as Nvidia's 5% slide deepened a tech rout.

"This is a week with more than its fair share of potential surprises, good and bad," said Chris Larkin, managing director of trading and investing at E-Trade from Morgan Stanley.

The S&P 500 edged up less than 0.1% to 7,413.18, while the Dow Jones Industrial Average gained 262.83 points, or 0.5%, to 52,210.08. The Nasdaq's 0.2% decline marked its fourth straight losing session. Technology shares led the selloff: Nvidia dropped 5% to $195.92, and Micron Technology slumped 5.5% after Chinese memory chipmaker CXMT surged 466% in its Shanghai debut, threatening DRAM pricing. Microsoft rose 1.9% and Apple gained 1.2%, partially offsetting losses. Communications stocks advanced, with Alphabet up 2.1% and Charter Communications jumping 6.7%.

The Nasdaq's breach of the 25,000 psychological level could trigger further technical selling, particularly in AI and semiconductor names that have driven this year's rally. The Federal Reserve's rate decision Wednesday looms as the next major catalyst, with markets pricing in a 36% chance of a hike. A 7.5% drop in WTI crude to $82.61 and the 10-year Treasury yield falling 4 basis points to 4.65% reflected a broader risk-off shift across asset classes.

The selloff was concentrated in mega-cap tech, with the Philadelphia Semiconductor Index underperforming as CXMT's $8.6 billion IPO — the largest in China this year — raised the prospect of increased DRAM supply and lower prices. CXMT closed its first trading day with a $487 billion market capitalization after soaring 466%, directly challenging Micron's dominant position in the memory chip market. Traders pointed to three catalysts driving the move: the CXMT threat to semiconductor margins, a 7.5% collapse in oil prices after the U.S. and Iran paused hostilities, and positioning ahead of the Fed's two-day policy meeting starting Tuesday.

Breadth data showed a mixed picture beneath the headline indices. Financial and consumer credit names outperformed: American Express climbed 2.8%, Capital One Financial added 2.1%, and Visa rose 1.9%. Payment processor Mastercard gained 2.2%. The 10-year Treasury yield fell to 4.65% from 4.69% on Friday, while Brent crude settled at $85.87 a barrel, down 6.3%, after the U.S. signaled willingness to give diplomacy room with Iran.

All three major U.S. indexes are on pace to close July in the red, which would mark the second straight monthly loss for the S&P 500 and Nasdaq. Investors now turn to a packed week of earnings from Microsoft, Apple, Amazon, and Meta Platforms, along with the Fed's rate decision and July inflation data due Thursday.

This article is for informational purposes only and does not constitute investment advice.