NASDAQ pludges over 2% on a messy profit take (again) after Trump's comment that he will tax Taiwan for military assistance, also note Biden's trade restrictions on Chinese chips to the U.S. . Stocks are looking like a reflation/inflation trade, while the DOW is holding gains as growth stocks are selling off.

The NASDAQ has gone through another messy profit take, the 1st to occur was on July 11th, when the U.S. CPI came in at 3% under estimates of a 3.1% rise, which was a cue to sell (profit take) in lieu of a possible rate cut by the Federal Reserve in September.  The 2nd, was the 17th July sell off, when Presidential candidate Donald Trump, made a decree in his odd libertarian sentiment, that if he is voted to be America's next President again, he would make Taiwan pay for their U.S. supported defense, this of course sent Taiwan Chip Manufacturing shares listed on the NASDAQ plunge over 1% (below pane).  Also note the China Hawks of the Biden Administration, which have support of the Republicans are about to implement harsh Trade restrictions on Chinese computer chips entering the U.S. markets.  This also contributed to the sell off.

The NASDAQ is grossly overbought, trading in no man's land, with its last support at 18600.  Can Tech stocks make a Triple top before another major sell off?

In the background to this, is the Federal Reserve echoing what many are claiming is the right time to cut rates in September this year, yet the oil price remains elevated above $80.  One cannot rule out an oil shock if stockpiles in the U.S. continue to be drawn down, or a broader Middle Eastern war.

Overall, the market looks like it is activating reflation/inflation trades, via hedging on cyclical stocks ala the DOW which was bid when the NASDAQ sold off.  Gold also rallied.