What next for the Nasdaq 100 Index and QQQ, VGT, and VGT ETFs?

The Nasdaq 100 Index has slumped in the past few weeks, erasing some of the gains made earlier this year when it jumped to a record high of $26,156.

It dropped to $23,765, its lowest level since September 10 last year. 

Similarly, related ETFs like Invesco QQQ (QQQ), Vanguard Information Technology ETF (VGT), and JPMorgan Nasdaq Equity Premium Income ETF (JEPQ) have all slumped this year. QQQ dropped to $578, while the VGT and JEPQ dropped to $700 and $56, respectively.

Technology stocks have slumped as the Fear and Greed Index plunge 

The ongoing sell-off in American technology stocks has coincided with the rising fear in the market as the Iran war has escalated.

Data shows that the closely-watched Fear and Greed Index has dropped to the extreme fear zone of 15, its lowest level in months.

All gauges except the one tracking market volatility, have moved to the extreme fear zone.

The market volatility gauge, which uses the VIX Index, remains in the fear zone.

Investors are fearful that the war will fuel inflation and make it nearly impossible for the Federal Reserve to cut interest rates this year.

Indeed, US bond yields have surged in the past few weeks, with the 10-year rising to 4.4% and the two-year moving to 3.90%.

In a statement last week, Jerome Powell said that the Fed was monitoring the ongoing Iran war and price movements.

Gasoline and diesel prices have jumped by double digits since the war started.

Similarly, airfares and shipping costs have jumped as Iran has largely closed the Strait of Hormuz.

These increases will make the already bad inflation situation worse.

A report released last week showed that the Producer Price Index (PPI) jumped 0.7% in February and 3.4% annually in February.

These numbers were much hotter than what analysts were expecting.

Therefore, analysts believe that the Federal Reserve will continue to maintain a hawkish tone in the coming months, including by hiking interest rates, a move that will lead to more Donald Trump ire.

The challenge, however, is that the labor market is also not doing well, with the unemployment rate rising to 4.4% and the economy shedding over 92k jobs in February.

As a result, rising interest rates or even status quo may make the situation worse.

The Nasdaq 100 Index has remained under pressure because of the ongoing concerns about the artificial intelligence (AI) industry, which some analysts believe is a bubble.

At the same time, there are concerns that the private credit industry continues to struggle, with many companies experiencing outflows.

Some of the top laggards in the tech industry,such as NXP Semiconductor, Microchip Technology, Texas Instruments, MercadoLibre, and GE Healthcare, have all declin are companies like NXP Semiconductor, Microchip Technology, Texas Instruments, MercadoLibre, and GE Healthcare, have all tumbled by over 14% in the last 30 days.

Some other best-known technology companies have also slumped.

For example, Tesla stock has dropped by 10%, while NVIDIA, Apple, Broadcom, and Adobe have slumped by over 8%.

Nasdaq 100 Index technical analysis

Nasdaq 100 Index chart | Source: TradingView  

The daily chart shows that the Nasdaq 100 Index has slumped in the past few weeks, dropping from the all-time high of $26,156 to the current $23,900, its lowest level since September 10.

It has dropped below the key support level at $23,900, its lowest level on November 21.

The index has also moved to the 23.6% Fibonacci Retracement level.

It also moved below the 50-day and 100-day Exponential Moving Averages (EMA) have slumped.

The two averages are about to cross each other, a move that may confirm the bearish outlook.

Therefore, the index will likely continue falling, potentially to the next key target level at $22,500, its 38.2% Fibonacci Retracement level, which is about 6% below the current level.

On the positive side, the index will then bounce back later this year as investors start buying the dip.