Nasdaq Dips 2% Amid Tech Selloff: Investor Sentiment Declines, Greed Index Moves To 'Fear' Zone

The CNN Money Fear and Greed index showed further decline in the overall market sentiment, while the index moved to the “Fear” zone on Thursday.

U.S. stocks settled lower on Thursday, with the Nasdaq Composite falling 2% during the session.

Despite topping earnings and revenue expectations, Cisco (NASDAQ:CSCO) shares tumbled more than 12% as investors fixated on softer forward guidance. AppLovin Corp. (NASDAQ:APP) plunged 20% even after beating estimates, with underwhelming guidance once again overshadowing headline results. American Electric Power Company, Inc. (NASDAQ:AEP) shares gained more than 3% on Thursday after the Ohio-based utility reported upbeat fourth-quarter results.

On the economic data front, U.S. initial jobless claims fell by 5,000 from the previous week to 227,000 in the first week of February, compared to market estimates of 222,000.

Most sectors on the S&P 500 closed on a negative note, with information technology, energy and financial stocks recording the biggest losses on Thursday. However, utilities and consumer staples stocks bucked the overall market trend, closing the session higher.

The Dow Jones closed lower by around 669 points to 49,451.98 on Thursday. The S&P 500 fell 1.57% to 6,832.76, while the Nasdaq Composite dipped 2.03% at 22,597.15 during Thursday's session.

Investors are awaiting earnings results from Advance Auto Parts Inc (NYSE:AAP), Wendy’s Co (NASDAQ:WEN) and Magna International Inc (NYSE:MGA) today.

What Is CNN Business Fear & Greed Index?

At a current reading of 36.9, the index moved into the “Fear” zone on Thursday, down from a prior reading of 48.4.

The Fear & Greed Index is a measure of the current market sentiment. It is based on the premise that higher fear exerts pressure on stock prices, while higher greed has the opposite effect. The index is calculated based on seven equal-weighted indicators. The index ranges from 0 to 100, where 0 represents maximum fear and 100 signals maximum greediness.

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