I’ve been trading forex for a while but I’m trying to understand how stock indices work, especially the NASDAQ. I keep seeing US100 (NASDAQ) mentioned in trading discussions and I’m wondering how it fits into the bigger picture.
From what I understand, the NASDAQ has a lot of tech companies, but I’m not sure if that’s all it represents. When people talk about “the market” going up or down, are they referring to the NASDAQ or something else like the S&P 500?
I’m trying to figure out if trading the US100 is basically just betting on tech stocks, or if there’s more to it. Does it move differently than other indices? And how does it relate to the overall US economy?
Any insights would be helpful. I want to make sure I understand what I’m actually trading before I dive deeper into indices.
NASDAQ’s heavily tech-weighted but has other sectors mixed in. The concentration’s crazy - top 10 companies are about half the index.
I always check what the mega caps are doing before trading US100. Keeps me from getting burned.
NASDAQ isn’t pure tech, but it’s close. Apple, Microsoft, and Amazon are massive chunks of it - when they move, everything follows.
I’ve traded US100 for 3 years. It’s way more volatile than SPX500 and reacts harder to tech earnings or Fed decisions. In 2022 when rates spiked, NASDAQ got crushed while SPX500 held up better.
When people say “the market” they mean SPX500 - 500 companies across all sectors. NASDAQ’s much narrower.
Here’s the thing with US100: a handful of giants drive everything. I’ve seen Tesla or Nvidia news move the whole index 2-3% in a day. It’s not diversified like people think.
I trade it as a tech play with extras. Great during tech rallies, brutal when growth sells off. Just know you’re getting concentrated exposure, not broad market.
NASDAQ 100 isn’t just tech. It includes retail and consumer firms like Tesla and Starbucks too. However, seven companies make up about 60% of the entire index, making it quite top-heavy. This leads to greater volatility compared to the S&P 500. In a rising market, US100 often performs very well. But when markets drop, it tends to get hit harder. Most traders still monitor the S&P 500 for a broader market view since it covers many more sectors.
Tech heavy but earnings season shows what really drives it.
US100 swings way harder than other indices because it’s packed with tech stocks.
I use it for momentum plays, not as a broad market gauge. When investors are feeling risky, US100 crushes SPX500. When they’re scared, it gets crushed back.
Just remember - NASDAQ isn’t the whole US economy. It’s growth-heavy and hates rate hikes, so Fed moves hit it differently than value indices.
