2025-12-12 Market Analysis: Nasdaq 100 Tech Selloff Amid Sticky Inflation Concerns

This analysis is based on a Bloomberg Television video [1] published on December 12, 2025, featuring Charles Schwab Chief Investment Strategist Liz Ann Sonders. Sonders warned that inflation is likely to remain “sticky” near 3% due to affordability pressures and a tight labor supply, raising concerns about potential shifts in monetary policy.

On the same day, U.S. equity indices declined across the board: the Nasdaq 100 (^NDX) dropped 1.31%, the NASDAQ Composite (^IXIC) fell 1.25%, the S&P 500 (^GSPC) decreased 0.86%, and the Dow Jones Industrial Average (^DJI) declined 0.53% [0]. The technology sector (-1.69%) was the second-worst performing sector after utilities, reflecting a broad tech selloff [0]. Broadcom Inc. (AVGO) experienced a sharp 5.27% drop on 93.22M volume following its weaker-than-expected sales outlook, weighing heavily on the tech sector due to its size and importance in semiconductors [0][1].

Bond yields surged, with the 10-year Treasury yield (^TNX) closing at 4.19%, up 0.38% from the previous day [0]. This rise reduced the relative attractiveness of growth stocks (like tech), which are more sensitive to interest rate changes [0][1]. The market was also vulnerable to profit-taking after the S&P 500 notched a record close on December 11 [1].

1. Macro-micro driver convergence
   : The selloff was fueled by both macroeconomic factors (sticky inflation fears, rising yields) and company-specific news (Broadcom’s weak outlook), creating amplified downward pressure on tech stocks.
2. Tech sector vulnerability
   : Extended valuations and heavy reliance on AI growth optimism made tech stocks susceptible to selloffs amid shifting rate expectations.
3. Investor rotation
   : The selloff reflects a broader rotation away from concentrated positions in “Magnificent Seven” tech stocks towards diversification (geographies and themes), reducing concentration risk [1].

• Inflation stickiness risk
  : If inflation remains near 3% as Sonders predicts, the Federal Reserve may delay further rate cuts, pressuring equity valuations [1].
• Tech sector vulnerability
  : Continued reliance on AI growth could lead to additional selloffs if earnings disappoint [1].
• Bond yield volatility
  : Sustained yield increases may reduce demand for growth assets, including tech and small-cap stocks [0].

• Diversification benefits
  : Rotation towards diversified portfolios may mitigate concentration risk in tech stocks [1].
• Long-term optimism
  : Strategists (including Goldman Sachs, targeting S&P 500 at 7,600 in 2026, +10% from current levels) remain broadly optimistic about equity markets [1].

On December 12, 2025, U.S. markets experienced a selloff led by the tech sector, driven by sticky inflation concerns, Broadcom’s weak sales outlook, and rising bond yields. The Nasdaq 100 dropped 1.31%, while Broadcom fell 5.27%. The 10-year Treasury yield rose 0.38% to 4.19%. Decision-makers should monitor inflation trends, Fed policy signals, tech sector earnings, and bond yield volatility to assess future market dynamics.