Nasdaq 100 futures (NQ)

Nasdaq 100 Futures (NQ) Drops Despite Upbeat US NFP

  • Nasdaq 100 futures (NQ) dropped 5% as the Fed’s impact weighed.
  • Upbeat US NFP could not help stocks gain positive momentum.
  • Under Armour dropped 16% in pre-market conditions.

The Nasdaq 100 futures (NQ) fell more than 5% to near 12,850 ahead of the US session. The index remains heavily weighed by the hawkish stance of the Fed.

The outlook for the stock should continue yesterday’s big sell-off, despite key NFP numbers beating expectations.

As a result of last week’s sharp sell-off and better-than-expected nonfarm payrolls, US stocks are expected to open almost flat on Friday.

Yesterday, shares plummeted sharply, with the Nasdaq falling 5% and shedding 3% gains from the previous session. In addition, a rise in inflation and aggressive measures by the Fed to curb growth dragged stocks lower yesterday. Although headlines today are optimistic, these worries continue to weigh on sentiment.

In April, the US added 428,000 jobs, higher than the forecast of 390,000 and similar to the revised March report. The unemployment rate remained at 3.6%. Strong employment growth shows that rising inflation and higher interest rates have not affected the labor market. However, a tightening monetary policy by the Fed is putting a drag on the labor market.

Average wages slowed down, but the market ignored it. In March, hourly earnings grew 0.5%. In April, earnings fell 0.3%. The pressure on wages is likely to continue with 11.5 million job vacancies, around 1.5 for every unemployed person.

Under Armour fell 16% pre-market after unexpectedly reporting a loss in quarterly earnings and forecasting lower full-year earnings due to supply chain difficulties and new Chinese restrictions.

There are no other important dates to release shortly. However, Fed’s Williams is scheduled to speak today, so we will focus on him.

Nasdaq 100  futures (NQ) technical analysis:

Nasdaq 100 futures (NQ) 4-hour chart
Nasdaq 100 futures (NQ) 4-hour chart

The Nasdaq 100 futures (NQ) fell sharply on the day. The price tested the May 02 lows of 12,714. With a brief gain, the index is wobbling around the lows. The outlook is strongly bearish as long as the index remains below the 20-period SMA. Moreover, the bearish crossover between the 50-SMA and 100-SMA indicates more potential to fall.

Alternatively, the outlook can turn positive if the price exceeds the 20-period SMA. However, the probability of an upside move is quite low.