Published: 18 December 2025,06:56
Daily Market Analysis New
*AI-led tech selloff deepens: Nasdaq underperformance was driven by renewed selling in AI-linked stocks, with Oracle and other large-cap AI beneficiaries lagging amid growing valuation and monetisation concerns.
*The pullback reflects a broader reassessment of the AI investment story, as investors question near-term earnings visibility, ROI, and the sustainability of heavy capex in data centres and cloud infrastructure.
*Adoption pace under scrutiny: Corporate surveys and recent earnings updates pointing to slower-than-expected AI deployment have reinforced fears that market expectations may have outpaced underlying fundamentals.
Market Summary:
U.S. equities, particularly the Nasdaq, came under renewed pressure as the selloff in AI-linked technology stocks deepened, dragging broader market sentiment lower. Oracle and other large-cap AI beneficiaries underperformed, as investors grew increasingly cautious about lofty valuations, the pace of AI monetisation, and the sustainability of elevated capital expenditure on data centres and cloud infrastructure.
The pullback reflects a broader reassessment of the AI narrative rather than a single headline catalyst. While long-term demand for AI services remains intact, markets are becoming more selective, questioning near-term earnings visibility and return on investment. Recent earnings updates and corporate surveys suggesting slower-than-expected AI adoption have added to concerns that expectations may have run ahead of fundamentals.
The weakness in tech stocks has also fed into wider risk aversion, weighing on the Nasdaq more heavily than the Dow Jones, which has been relatively cushioned by exposure to more defensive and value-oriented sectors. As equities softened, volatility crept higher, contributing to the late-session stabilisation in the U.S. dollar and reinforcing safe-haven demand for gold.
Looking ahead, Wall Street’s near-term direction will hinge on whether upcoming U.S. macro data validates expectations of a soft landing without a sharp earnings slowdown. Until clearer confirmation emerges, AI-linked tech stocks may remain vulnerable to further consolidation, with investors favouring balance-sheet strength, pricing power, and defensiveness over high-growth narratives.
Technical Analysis
The Nasdaq remains constructive on the chart despite the recent pullback from the 25,700 resistance level, which continues to act as a major supply area following the prior rally peak. After breaking higher from the mid-year consolidation base, price has eased back toward the 24,650 region, suggesting a corrective retracement rather than a full trend reversal. The broader bullish structure remains intact as long as price holds above the key higher-low support near 23,900.
Momentum indicators point to cooling but not yet decisively bearish conditions. The RSI has slipped toward the low 30s, reflecting increased downside momentum and short-term oversold pressure, which could support a technical bounce if selling pressure eases. Meanwhile, the MACD remains in negative territory with a deep bearish histogram, highlighting strong downside momentum, though the pace of selling may begin to stabilize if momentum divergence develops.
Resistance Levels: 25,700.00, 27,970.00
Support Levels: 23,910.00, 22,500.00
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