Nasdaq Claws Back the Chip Selloff Into the Fed

On Tuesday, semiconductors knocked the Nasdaq-100 down two percent, and overnight it set about clawing half of it back.

The September contract settled the prior session at 30,313.75 after the cash index shed roughly 2 percent on a pronounced wave of chip weakness, with a softer crude market pulling Treasury yields down alongside it. Overnight, the contract based near 30,306.50, rallied to 30,584.50, and trades near 30,470, a gain of about 0.5 percent that recovers a portion of the decline and leaves the index just beneath its near-term pivot. It is a relief bounce sitting on top of a fresh down-day, and the market is unwilling to commit ahead of the afternoon.

The dominant feature of today is the calendar, not the chart. The policy statement, the updated projections, and the rate-path forecast all print at 2:00 PM ET, with retail sales at 8:30 AM. Today is also a volatility-product expiration, tomorrow is the broad monthly options expiration, and Friday the market is closed for the Juneteenth holiday. The trend structure remains constructive, price holds above every major average and the composite reads 72 percent buy, but dealer-hedging conditions across the index complex have turned fragile, which historically amplifies the post-decision move in both directions.

Constructive, but cautious

The moving-average stack is unambiguously bullish, with spot above every average and each rising: the 5-day at 30,273, the 20-day at 30,171, the 50-day at 28,752, the 100-day at 26,967, and the 200-day at 26,408. Price sits just above the 5-day and 20-day, which form the first dynamic support shelf near 30,170 to 30,275, while the wide gap to the 50-day shows how extended the index remains. Momentum is supportive without a warning: relative strength is mid-range in the high-50s, the 14-day directional index near 26.7 confirms an intact, moderately strong uptrend, and the composite reads 72 percent buy across short, medium, and longer groups.

The caution sits in the positioning. The prior session's real-time hedging flow registered near its most negative reading of the past thirty sessions, a balanced mix of call selling and put buying that reads as broad, systematic de-risking into the event rather than directional bets. Through the Nasdaq-fund proxy, net dealer gamma across the index complex is negative, the fragile state where hedging amplifies rather than dampens swings. The single most important internal tell is the chip sector: whether Tuesday's selling was a one-day trim or the start of a deeper rotation. This continues the coil that followed Monday's record-high consolidation.

Three events, three sessions

Today's data is front-loaded by retail sales and back-loaded by the decision. Retail sales at 8:30 AM is the first mover; a hot print lifts yields and pressures rate-sensitive growth names, while a soft print does the reverse. The 2:00 PM decision and projections are the single first-order event, with market-implied dots near 3.625 percent for this year and 3.375 percent for next, both modestly higher than the prior set, so the cutting cadence is what the room will scrutinize. The press conference at 2:30 frequently sets the durable trend leg. And the structure of the week, a volatility expiration today, monthly options expiration tomorrow, and a closed Friday, adds a volatility-selling tilt into the three-day weekend if the decision passes cleanly.

Buy the shelf, gate it to the print

The working bias is a long continuation, but only on confirmation. Favor a long into the 30,330 to 30,360 area on a post-9:45 hold of the 30,306 to 30,313 shelf, or a momentum reclaim and acceptance above 30,584 after the decision, with a stop below 30,290. The first objective is the 30,584 overnight high, then the 30,696 to 30,752 supply shelf, then the 30,933 to 30,975 zone that includes the five-day high, with the 31,100 record the wall a true extension must clear. A sustained move below 30,290 negates the long and opens 30,209 then 30,065. The discipline is to treat the morning as range-trading only and size the trend trade after the catalyst resolves, since the negative-gamma backdrop keeps both tails live and the press-conference move often matters more than the first.

The chips that broke the index on Tuesday are the same ones being watched to mend it, and the Fed will decide which way they lean.