US stock indices declined sharply, with the Nasdaq Composite dropping over 1.7% to 23,195.17, as technical levels including the 50-day moving average were broken, raising concerns of a short-term correction. The Nasdaq formed a lower high around 23,700 compared to its previous peak near 24,020, signaling bearish momentum. The selloff was driven by significant declines in major tech stocks such as Broadcom, AMD, NVIDIA, Micron, and Intel, despite some earnings beats, reflecting market focus on margin pressures and profit-taking. Pre-market trading on Monday indicates a potential rebound, with major tech stocks showing gains, but the overall technical picture remains fragile. The broader market shows signs of weakening, with the S&P 500 breaking below its 100-hour moving average and approaching key retracement levels, suggesting increased downside risk. Investors are rotating out of tech into financials, healthcare, and industrials, especially after the Federal Reserve’s rate cut to a range of 3.5%-3.75%. Market sentiment has shifted from neutral to bearish among retail traders, amid upcoming economic data including employment reports and inflation figures. Technical analysis highlights a lower high in the Nasdaq and the index approaching its 50-day moving average, which, if broken convincingly, could lead to further declines toward 22,698 and lower levels. The market’s recent behavior, including broken moving averages and fading momentum, indicates increased control by sellers. Traders are advised to watch resistance levels closely and prepare for potential volatility as the market navigates these technical signals.