FOMC leadership candidate triggers chain reaction, US tech stocks plummet, NASDAQ technicals at risk

Monday’s Asia-Pacific stock markets collectively declined, with the Nikkei 225, Taiwan Weighted, KOSPI, and Hang Seng Index all dropping over 1%. The culprit points to last week’s remarks by Trump—he favors choosing between Waller and Haskett as the next Federal Reserve Chair and expects interest rates to fall to 1% or even lower in a year. These comments directly impacted market expectations of the Fed’s independence, triggering panic selling among investors.

Tech Giants All Fail, Chip Sector Leads Decline

U.S. stocks responded with a sharp drop. Broadcom and Oracle suffered heavy losses, with Broadcom falling 11.4%, and Oracle dropping 4.5%, while credit risk indicators hit a 16-year high. The Philadelphia Semiconductor Index plummeted over 5%, and the Nasdaq experienced its largest single-day decline in three weeks. Behind this sell-off, the market is reflecting changing expectations of Fed policy and exposing deep concerns about the AI industry chain—growing conflicts between large-scale capital expenditures and downstream corporate profits.

Divergence in U.S. Treasury Yields Highlights Market Split

There is a clear divergence in short- and long-term U.S. Treasury yields. The 2-year yield dipped to 3.52%, while the 10-year rose to 4.18%, and the 30-year reached 4.84% (a high since September). This divergence reveals complex investor sentiment—doubts about the employment outlook and vigilance over inflation pressures. Rising long-term yields put direct pressure on high P/E stocks, making the high valuation and increased volatility of U.S. stocks more apparent.

Non-Farm Payrolls and Policy Vacuum Pose Double Challenges

The market will focus on Tuesday’s November non-farm payroll data. Although expectations are for an increase of 130,000 jobs, this rebound is mainly due to seasonal adjustments rather than genuine labor market improvement. If the data falls short of expectations, it will further dampen U.S. stock earnings outlooks. More concerning is that after the Fed likely ends its preemptive rate cuts in December, a policy vacuum period will follow, increasing the risk of U.S. stock corrections.

Nasdaq Technical Outlook: The 25,000 Point Support at Risk

The Nasdaq 100 index’s daily chart shows it has been twice resisted at the 26,000 level and experienced its largest single-day drop in three weeks, indicating a clearly weak short-term trend. If the index further breaks below the 25,000 psychological level, the next support will be at 24,000. Currently, U.S. stocks are caught between high valuations and high volatility, and the future trend depends on whether non-farm payroll data and AI industry earnings expectations can reverse the downward momentum.