For the first time in months, the S&P 500 had a down day of more than 1%, and in doing so, broke through multiple support levels. Technology was one of the biggest losers today, with the Nasdaq down over 2%. The VIX is now trading at 16, which is the highest level on the year. When there is a ton of complacency in the market, all it takes is one negative headline to spook investors. This sell-off is healthy for the market and in fact will probably help facilitate gains later in the year. The S&P 500 had lost all its momentum in the last couple of weeks and this washout could help bring in some buyers.
It has been awhile since the broader market saw a meaningful downside move. Around mid-day today, the Nasdaq, represented by the QQQ, started to fall, led by a sharp decline by ‘FANG’ stocks and other high-fliers like Nvidia (NVDA). While a pullback is to be expected given the run, what came as a surprise, was the free fall that happened mid-day. The Nasdaq plunged over 2% is 1 hour with many of these ‘FANG’ stocks falling more than that in that same hour.