The Invesco QQQ Trust ETF is experiencing downward pressure due to a combination of macroeconomic factors and market reactions to recent data. The U.S. non-farm payroll report released on January 10, 2025, significantly exceeded expectations, with 256,000 jobs added in December compared to the forecasted 164,000. This robust job growth, coupled with a drop in the unemployment rate to 4.1%, has led to a reassessment of the Federal Reserve's monetary policy trajectory. Market participants are now anticipating a delay in rate cuts, with the first expected cut pushed back to October. This shift in expectations has resulted in a rise in U.S. Treasury yields, which is particularly impactful for growth-oriented stocks that dominate the QQQ ETF.
The tech sector, a major component of the QQQ ETF, is also facing headwinds from rising yields. Higher interest rates tend to reduce the present value of future earnings, which is a critical factor for high-growth tech companies. Additionally, the market is reacting to potential new U.S. restrictions on chip exports, affecting major players like Nvidia. These developments have contributed to a broader selloff in tech stocks, further exacerbating the decline in the QQQ ETF.
The Invesco QQQ Trust ETF is currently priced at $507.55, reflecting a 1.50% decrease from the previous close.