No bottom for stocks yet, Nasdaq extends fall to 2.6%. What is the bear/bull case?

The Nasdaq Composite is now down 2.6% with Nvidia acting as an anchor with a 7.9% decline.

The chart doesn’t look great here as it never really approached the old high and looks like it’s on the way to some consolidation, in what’s a tough month seasonally. The Fed cutting by only 25 bps would add further pressure.

The bull case at this point would have to be a slightly-soft (but not too soft) non-farm payrolls report followed by a 50 bps cut from the FOMC. That’s not exactly threading the needle but it’s certainly an outlier.

Another thing that could give the Nasdaq a jolt would be some further breakthrough in AI, like GPT-5. But despite all the rumours that seems nowhere close to imminent and the voice features demoed months ago for GPT-4o still haven’t rolled out.

The risk is that we’re heading into some kind of AI shakeout or stagnation that raises some question about how transformative it will really be. If that’s the case, then there is going to be some pressure on megacap tech that’s tough for fight.

This article was written by Adam Button at www.forexlive.com.