Tech stocks suffered their biggest one-day drop since 2022 as investors’ concerns over an impending economic recession intensified.
The Nasdaq 100 index plunged 3.8%, with Monday’s sell-off wiping out more than $1 trillion in market value. Meanwhile, the Bloomberg Big Seven Technology Index (an equal-weighted index tracking the largest U.S. technology stocks) dropped 5.4%, extending its decline from December to over 20%. Tesla Inc. fell 15%, widening its year-to-date decline to 45%, while Nvidia Corp. dropped 5.1%, with its market value evaporating by more than $1 trillion in two months.
Before the tech stocks crashed, officials of the Trump administration and President Donald Trump himself had hinted that the US economy would slow down. Trump had promised during his campaign that he would impose tariffs on the first day of his tenure to pay for tax cuts without affecting economic growth. This wording was different from that during the campaign, which triggered a frantic repricing of risky assets.
However, the US dollar has not gained further ground in its recent tussle with the euro. Last week, the euro/dollar pair recorded its strongest weekly performance in two years as German bond yields rose.
Pierre Gramegna, the managing director of the European Stability Mechanism, told reporters in Brussels on Monday that “the US government’s supportive stance towards cryptocurrencies, especially dollar-denominated stablecoins, may cause some concerns in Europe.”
The Trump administration has embraced digital currency. Last week, the US president signed an executive order establishing separate reserves for Bitcoin and other tokens. The move said both would include cryptocurrencies seized as part of legal proceedings.
Meanwhile, the European Central Bank, which has refused to add Bitcoin to its currency reserves, has been developing a digital euro since 2021 and will make a final decision on whether to implement it later this year.
Gramegna said that the change in the US stance on digital currencies “could eventually reignite plans by foreign and US tech giants to launch mass payment solutions based on dollar-denominated stablecoins.” “If this plan succeeds, it could affect the monetary sovereignty and financial stability of the eurozone.”
Therefore, the ESM supports the ECB’s “urgent move to make the digital euro a reality to safeguard Europe’s strategic autonomy – a digital euro that is more necessary today than ever before,” he said.
Technical analysis:
Gold: The price broke through the lower limit of our yellow zone at 2891 overnight. After clearing the liquidity, it has rebounded to the 2890-2900 range. If the price can recover and stabilize within the day, we will pay attention to the buying attempt from 2900 to 2920. Meanwhile, we will also keep an eye on the rebound opportunity after refreshing the liquidity near 2880. For detailed positions, please consult the plugin.
(Gold 15-minute chart)
The plugin is updated from 12:00 to 13:00 every trading day. If you want to experience the same plugin as shown in the chart, please contact V: Hana-fgfg.
The Nasdaq index: After a sharp drop overnight and breaking through the yellow liquidity zone, it did not rebound but continued to decline to around 19,100. During the day, the price made a corrective rebound to around 19,450. In terms of operation, maintain the idea of catching a rebound after a new low; meanwhile, the area of 19,900 – 20,000 can be attempted for a short position opportunity. For detailed positions, please consult the plugin.
(NASDAQ 15-minute chart)
The plugin is updated from 12:00 to 13:00 every trading day. If you want to experience the same plugin as shown in the chart, please contact V: Hana-fgfg.
Crude oil: Yesterday, our plugin reminded us to look for an opportunity to buy on a rebound after the price hit a new low in the yellow zone. The price dropped all the way to around 65 before starting to rebound. Currently, it has just returned to the area just below the yellow zone for the day. In terms of operation, we should wait for the price to recover above the yellow zone and then look for a long signal. For detailed positions, please consult the plugin.
(Crude Oil 15-Minute Chart)
The plugin is updated from 12:00 to 13:00 every trading day. If you want to experience the same plugin as shown in the picture, please contact V:Hana-fgfg.
Today’s key financial data and events to focus on:
20:55 US Redbook Commercial Retail Sales (YoY) Last Week
22:00 U.S. Job Openings and Labor Turnover Survey (JOLTS) for January (in thousands)
