Nasdaq 100 Forecast: Markets Under Pressure
By Fawad Razaqzada, Market Analyst
Date: February 5, 2026
Market Overview
US index futures have declined alongside European markets, marking a challenging start to the year for the tech sector. The Nasdaq 100 index has lost all its gains for the year in just a few sessions, raising concerns about a potential market top. However, analysts caution that it is too early to make definitive claims about a market reversal.
Factors Contributing to Market Weakness
The recent downturn is attributed to several factors:
- Stretched valuations and heavy capital spending.
- Concerns regarding the sustainability of the AI trade.
- Volatility in precious metals prompting traders to liquidate positions.
Despite these challenges, some sectors, particularly those related to economic growth, are showing resilience. Software stocks have been hit hard, but this may present opportunities for dip buying.
Earnings Reports and Market Sentiment
This week's earnings reports from major companies like Alphabet, Arm, and Qualcomm exceeded expectations, yet their stock prices fell. This trend indicates that merely meeting expectations is insufficient in the current market; exceptional results are necessary to support high valuations.
Alphabet's increased investment in AI has provided some support to the chip sector, preventing a more severe sell-off.
Cryptocurrency Market Impact
The cryptocurrency market is also experiencing a downturn, with Bitcoin falling below $70,000 and Ether reaching its lowest levels since May 2025. This decline in crypto has further dampened risk appetite in the tech sector.
Technical Analysis of the Nasdaq 100
From a technical perspective, the Nasdaq 100 index has been consolidating after peaking in October. Currently, it is testing key support levels between 24,500 and 24,880. A break below this range could signal a more negative trend, while resistance levels are identified at 25,110 and 25,415.
Despite recent selling pressure, there is no strong evidence of a definitive market downturn, and analysts remain cautiously optimistic, suggesting that the market is in a consolidation phase rather than a bearish trend.
Conclusion
While the Nasdaq 100 faces significant challenges, the overall market backdrop remains supportive. Until clear bearish signals emerge, analysts are inclined to favor a bullish outlook for the index.