• The Nasdaq 100 fell 1.5% in afternoon trading, extending its recent slide amid broad tech weakness.
  • Mega-cap technology stocks, including Nvidia and Broadcom, led the decline as investors rotated out of growth names.
  • Higher Treasury yields and Fed rate uncertainty continue to weigh on the tech-heavy index.

The Nasdaq 100 extended its drop to 1.5% on Thursday, deepening a selloff driven by weakness in mega-cap technology stocks. The index has now fallen over 3% this week, marking its worst stretch in months.

Losses were led by Nvidia and Broadcom, which each fell more than 3%, as traders grew cautious ahead of key earnings reports and AI-related capex updates. The broader tech sector has been under pressure as rising Treasury yields — the 10-year note hovering near 4.3% — erode the appeal of growth stocks with longer-dated cash flows.

“We’re seeing a classic rotation out of tech into defensives as the macro outlook gets cloudier,” said a portfolio manager at a major asset manager. “The market is repricing risk after a prolonged rally.”

The selloff comes amid renewed concern about the Federal Reserve’s path forward. Minutes from the latest Fed meeting, released Wednesday, showed policymakers still wary of inflation, with some members advocating for higher rates for longer. Traders have scaled back bets on rate cuts, with the first cut fully priced only by December.

Economic data also dragged on sentiment, with initial jobless claims rising more than expected, suggesting some softening in the labor market. While that could ease wage pressures, it also fueled concerns about consumer demand.

The Nasdaq 100’s decline has broader implications for ETFs and retirement funds heavily weighted toward tech. The Invesco QQQ Trust (QQQ), which tracks the index, has lost nearly $10 billion in assets this week, according to data compiled by Bloomberg.

Analysts remain split on the near-term outlook. Some see the pullback as a buying opportunity if earnings from megacap firms — due next week — beat expectations. Others warn that valuations remain stretched, with the index trading at about 25 times forward earnings. “We need a catalyst to reignite confidence,” said a strategist at a Wall Street bank. “Right now, uncertainty is the only certainty.”

Editor's note: This article has been updated to reflect the afternoon trading drop of 1.5% and to include details on ETF flows.