US Tech 100 falls nearly 8% from Monday open after US midterms

By Olivia Hart

The US Tech 100 slid from 28,504 at Monday's open to a seven-month low of 26,248 on Friday, an almost 8% drop, before recovering to 26,969. Pepperstone attributed the 721-point rebound to tentative dip-buying. The close remained 905 points above the index's first support level, 26,064.

What triggered the sell-off?

Last Tuesday's US midterm elections supplied the immediate catalyst, Pepperstone said. Democrats regained control of Congress, and investors worried tighter rules could affect artificial intelligence, semiconductor exports and the expansion of energy-intensive data centers.

Those concerns were “potentially threatening the profitability and growth prospects of some of America's biggest technology companies,” Pepperstone said. Political uncertainty may have accelerated a correction already building amid stretched technology valuations and doubts about the sustainability of the AI investment boom.

Potential leveraged position liquidations may have amplified the wave of selling, according to Pepperstone. The broker did not name the popular technology stocks that suffered significant losses or quantify company-level damage. The takeaway: elections supplied the trigger, while stretched valuations and AI-investment concerns may have made the market vulnerable.

How could inflation change the outcome?

Two US inflation releases could shape expectations for the Federal Reserve's December interest-rate decision, Pepperstone said. The Consumer Price Index arrives Tuesday at 1330 GMT, followed by the Producer Price Index on Friday at 1330 GMT. The analysis offered no forecasts, prior readings or consensus estimates.

Moderating inflation could support technology stocks by reducing the perceived likelihood of another rate hike, according to Pepperstone. Stronger figures could revive monetary-tightening concerns, push US Treasury yields higher and renew pressure on the US 100. The release times identify catalysts, not clues about the likely outcome.

The takeaway: inflation can amplify either the rebound or the sell-off, and Pepperstone supplies no evidence yet on which direction the data will take.

Is this already a bear market?

No. A bear market typically requires a decline of at least 20% from the most recent high, Pepperstone said. The index fell 16.4% from its October 6 all-time high of 31,386 to its November 6 low of 26,247, leaving it short of that threshold.

Pepperstone's weekly recap lists Friday's low as 26,248, while its technical section uses 26,247. The one-point difference does not alter the 16.4% calculation, but it shows why readers should distinguish the narrative recap from the chart inputs.

Pepperstone said Friday's apparent capitulation might provide a short-term foundation for recovery, or it might precede another selling wave toward lower support. It also said shaken confidence could prevent enough buying interest from returning for a sustained rebound. The takeaway: a severe drawdown is not the same as a confirmed bear market.

Where are the technical fault lines?

Support at 26,064 represents the 61.8% Fibonacci retracement of the rally from March 31 to October 6, according to Pepperstone. A close below that level could trigger further weakness and an extended downside phase. The next support sits at 24,757, the April 13 low; below it, Pepperstone identifies 23,767, the April 7 low.

While 26,064 holds, Pepperstone says the sell-off could prove corrective rather than the start of a broader bearish trend. A decisive close above 27,238, the 38.2% retracement of the November 4-to-November 6 decline, would signal renewed upside scope. These levels work as closing-based scenario markers, not guaranteed price floors.

Further closing breaks above 27,544, the 50% retracement, could expose 27,850, the 61.8% retracement, and then 28,840. Pepperstone describes 28,840 as the November 4 failure high. The takeaway: 26,064 defines the downside trigger, while 27,238 is the immediate test for buyers.

What are the limits of the analysis?

Pepperstone labels the material a marketing communication that does not meet legal requirements designed to promote the independence of investment research. Its warning is explicit: “Pepperstone doesn’t represent that the material provided here is accurate, current or complete.” The broker also says the information is not a recommendation, an offer to trade or a solicitation to join a trading strategy.

Pepperstone says readers should seek advice suited to their own finances and objectives. It also says the broker will not seek an advantage before clients receive the analysis and bars reproduction or redistribution without approval. The published analysis offers no earnings data, valuation multiples or complete set of economic forecasts.

The caveat matters because the market case rests on technical thresholds and macro scenarios. A durable recovery could require buyers to clear 27,238 while softer inflation eases rate fears; a close below 26,064 would strengthen the case for another downside leg.