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6 June 2025,08:41

Daily Market Analysis

Nasdaq Struggles for Direction Amid Trade Uncertainty and Labor Market Concerns

6 June 2025, 08:41

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 Key Takeaways:

*The Nasdaq Composite remains supported by strong AI-led earnings and IPO optimism, though Tesla’s sharp decline has dented sector sentiment.

*Soft U.S. labor data and trade uncertainty with China continue to weigh on growth outlook, limiting Nasdaq’s upside potential.

Market Summary:

The Nasdaq Composite remains in a fragile holding pattern, as optimism around renewed U.S.-China trade talks competes with intensifying macroeconomic pressures and tech-sector volatility. While the index shed 0.8% on Thursday, its modest weekly gain of 1% underscores a resilient undercurrent in AI-driven demand and corporate earnings, despite high-profile disruptions such as Tesla’s 14% plunge.

From a policy standpoint, sentiment received a brief boost from renewed communication between U.S. and Chinese leaders, though the absence of substantive progress on tariff relief has limited follow-through. In the absence of tangible de-escalation, trade-sensitive sectors—particularly semiconductors and hardware—remain exposed to further downside. This uncertainty has added to the weight of a weakening domestic labor market, with jobless claims surging to 247K and ADP payrolls coming in well below expectations, intensifying fears of a growth slowdown.

Despite these headwinds, select tech names continue to deliver. Microsoft and Amazon posted steady gains, while software firms linked to generative AI maintained strong performance, reinforcing structural demand in high-growth verticals. At the same time, a nascent recovery in the IPO pipeline and geographic tech expansion into areas like Texas suggest long-term potential remains intact.

Technical Analysis 

Nasdaq, H4

The Nasdaq Composite pulled back after testing resistance near the 22,000 psychological level, closing Thursday’s session down 0.86% at 21,547. The index remains above its ascending trendline support, but the recent rejection from the upper range raises the risk of near-term consolidation or correction. Despite holding above 21,500 for now, repeated failures to break higher signal buyer exhaustion after a strong rally from the March lows.

Momentum signals are turning more cautious. The Relative Strength Index (RSI) has slipped to 58 , forming a mild bearish divergence relative to price. This flattening RSI profile suggests diminishing bullish momentum, even as the broader trend remains intact. Meanwhile, the MACD has turned lower, with the MACD line crossing beneath the signal line and the histogram flipping negative—highlighting a possible loss of upward drive. Traders will watch for follow-through from Friday’s macro catalysts to confirm direction.

Resistance levels: 22,200, 23,550

Support levels: 21,000, 20,000

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