Nasdaq Pulls Back Ahead of Fed Minutes; Tech, AI Shares Under Pressure
Nasdaq Composite opened lower and traded at 22,368.57 (down 0.79%) on Tuesday, extending a four-week pullback as technology and AI-related stocks weaken. Nasdaq futures had signalled a weaker open. The S&P 500 and Dow showed mixed moves, with the S&P down about 0.4% and the Dow up ~0.3%, suggesting sector rotation from high-growth tech to more defensive names. Concerns center on returns from large corporate AI investments, paused buybacks, equity issuance and debt raises to fund projects, and scrutiny of software business models amid increased AI competition. The Nasdaq has recorded its longest losing streak since 2022; the S&P has fallen in four of five weeks. Earnings this week from Constellation Energy, Medtronic, Palo Alto Networks and Walmart may influence sentiment. Key economic catalysts include the Federal Reserve’s January meeting minutes due Wednesday and Friday’s GDP, Core PCE and PMI releases. Traders will watch the FOMC minutes for clues on rate outlook and potential cuts this year, which could trigger a market rally or further downside.
Neutral
The article reports a technical-driven pullback in Nasdaq and sector rotation away from expensive tech/AI names while markets await the Fed’s January meeting minutes. This is neutral for crypto markets overall because: - Direct crypto-specific news is absent; macro signals (Fed minutes, GDP, Core PCE) are the primary drivers. Tighter policy or hawkish guidance would be bearish for risk assets including crypto; dovish hints or clearer paths to cuts would be bullish. - Short-term: heightened volatility is likely. Traders may see risk-off flows from high-beta assets (including some large-cap crypto) if minutes suggest slower easing. Conversely, a dovish surprise could spark quick risk-on rallies. - Long-term: the story reinforces that monetary-policy cues and tech-sector revaluation shape risk appetite. If corporate AI spending slows materially, it could reduce liquidity/support for equity and related speculative assets, indirectly pressuring crypto over time. Historical parallels: crypto often tracked equity risk sentiment in 2018-2022—Fed hawkish surprises (or signaling fewer cuts) produced short-term crypto drawdowns, while clear easing cycles in 2020–21 supported extended rallies. Traders should watch the FOMC minutes, bond yields, and equity tech flows; manage position sizing, set stop levels, and consider volatility products or hedges until clarity on Fed policy emerges.