Yesterday, US stock indices closed with losses. The S&P 500 fell by 1.17%, the Nasdaq 100 plummeted by 2.04%, and the Dow Jones Industrial Average lost 0.53%.

Global indices continued to drop after their sharpest decline in nearly a month, fueled by concerns over inflated valuations. Bonds rose, and investors turned to safe-haven currencies such as the yen. Futures on US stock indices decreased, signaling further declines for the S&P 500 and Nasdaq 100 after a large sell-off in tech stocks. Market sentiment was unstable at the start of the Asian session after shares of Super Micro Computer Inc. sharply fell at the end of trading, and Advanced Micro Devices Inc. failed to convince investors with its revenue forecasts.

This backdrop created an atmosphere of nervousness, where even moderately negative signals trigger heightened reactions. Traders are concerned about worsening corporate profits in the tech sector, which has long served as the growth engine for the US stock market. Particular unease surrounds uncertainty regarding the development trajectory of artificial intelligence, which has sparked a true investment frenzy in recent months. Investors are now assessing the prospects of tech companies with particular scrutiny, focusing not only on current financial performance but also on future forecasts. Tepid comments from Advanced Micro Devices Inc.'s management regarding potential growth rates led to disappointment, prompting the market to reassess its expectations for profitability across the entire semiconductor sector.

Asian indices fell by 1.3%. The South Korean Kospi, a shining example of the AI boom and one of the year's most dynamic markets, along with the Japanese Nikkei, dropped by about 3%.

As investors sought safe-haven assets, US Treasury bonds rose: the yield on 10-year bonds fell by two basis points to 4.07%. Gold recovered after its largest drop in over a week. The yen strengthened to 153.47 against the dollar.

A pullback was expected after the strong and sustained growth of the tech sector. The combination of a stronger dollar, the weakening of the cryptocurrency market, and concerns over the valuation of major US tech companies exerted pressure on risk appetite.

A pause in the global stock rally occurred after promising forecasts regarding artificial intelligence and hopes for further rate cuts by the Federal Reserve led to a nearly 40% increase in US stock indices since the April lows. However, this growth was limited by a smaller number of advancing stocks, as sentiment and technical indicators showed signs of overheating, prompting Wall Street leaders to view a potential retreat as a positive development. Warnings about inflated stock valuations from several leading financial giants yesterday exacerbated the market situation.

As for commodities, Brent crude oil fell to around $64 per barrel, while prices for copper and iron ore remained stable after the elimination of previous losses.

Regarding the technical picture of the S&P 500, the main task for buyers today will be to overcome the nearest resistance level of $6,769. This will help the index gain ground and pave the way for a potential rise to the new level of $6,784. An equally important objective for bulls will be to maintain control above the $6,801 mark, which would strengthen buyers' positions. In the event of a downward move driven by reduced risk appetite, buyers must assert themselves around the $6,756 area. A break below this level would quickly push the trading instrument back to $6,743 and open the path toward $6,727.