NASDAQ 100 Index Price: What Moves the NASDAQ?

The Nasdaq 100 (US-Tech 100) index follows the 100 largest non-financial companies traded on the Nasdaq Stock Market. They are chosen by the size of their market capitalisation and given various weights on the index, depending on their size.

The price of the Index is ultimately affected by the same economic events that affect the share price of the stocks that make up the Index itself. Company profits, growth potential, the strength of the US dollar, and news releases are just a few of the factors that traders normally consider when preparing to trade CFDs on the US-Tech 100.

TL;DR

• The Nasdaq tracks the 100 largest publicly traded U.S. companies.
• It is heavily weighted toward tech giants like Apple and Microsoft.
• Its value can be moved by earnings, trader sentiment, economic data, political events, and news.

How Is the Nasdaq 100 Calculated?

Working as a modified market-capitalisation weighted index, the Nasdaq 100 gives about 46.55% (as of June 2025) of the index's value to the 10 largest member companies. Over the last 20 years, these top positions have been dominated by the technology sector, which has grown at a faster pace than any other sector.

This weighting process limits the influence of its composite's top companies, which differentiates the Nasdaq100 from classic market capitalisation indices, such as the S&P 500 or FTSE100 (UK100), or price-weighted indices, such as the Dow Jones Industrial Average (US 30).

What Moves the Nasdaq 100 Index?

There are various factors that can move the Nasdaq 100.

Share Price

The weight given to each company included in the Nasdaq 100 influences how the individual share price moves the overall index. The index is a weighted collective of share prices; in general, rising share prices will increase the value of the index, and falling share prices will reduce it. It is important to remember that with the Nasdaq 100, company shares are weighted differently depending on their market cap.

For example, suppose the share prices of Apple, Microsoft, and Amazon all rise in one day. In that case, their influence on the Nasdaq 100 overall may push the index's value higher, because usually these three companies hold the most weight. At the same time, if every other company's shares fall on that same day, it is possible for the value of the index to drop, as it is based on the collective valuation of the underlying shares.

Trader Sentiment

Trader sentiment impacts the Nasdaq 100 by influencing the values of the underlying shares. A trader's attention can cause the underlying share prices inside the Nasdaq 100 to possibly change. Share prices can also climb following an announcement of quarterly earnings or projected growth due to an unexpected outcome.

Major buying or selling of shares of any given company can be enough to move the price, as it grabs the attention of more traders. As the underlying assets begin to move, so too does the value of the index.

Being a weighted index, a significant rise or fall of the share price of only one of the top 10 companies can move the price of the whole index.

Political Events

Political events have the potential to help or hurt business activity. A new policy may impact an industry's ability to perform business, affecting the whole index if its component companies are concentrated within that industry. For example, if the United States government suddenly declares that U.S.-based companies can no longer sell their goods to a foreign country, it may negatively impact share prices throughout an industry.

Beyond trade policies, geopolitical tensions and conflicts can cause significant market volatility. For instance, escalations in the Middle East, such as the war between Israel and Iran and U.S. military involvement, can create instability in global energy markets, increase defence spending, and lead to broader economic uncertainty. These developments can affect investor confidence, impact global supply chains, and influence sectors like technology, defence, and energy, all of which can have a ripple effect on the Nasdaq 100.

Many forces impact the Nasdaq 100 and the companies listed on it. Profit, trader sentiment, economic strength, geopolitical risks, and other factors can all potentially move the price of this modified market-capitalisation-weighted index. Traders must remain aware of stock movements and global news to keep their finger on the market's pulse.

Conclusion

The Nasdaq 100 (US-Tech 100) is more than just a collection of the largest non-financial companies listed; it reflects broader economic forces, technological growth, and global investor sentiment. Whether it's quarterly earnings, political developments, or shifts in international trade policy, each factor shapes the index's performance. Traders and investors must stay informed, especially in a landscape shaped by fast-moving news and events like geopolitical tensions or monetary policy changes. Understanding what moves the Nasdaq 100 gives you a critical edge when navigating this influential index.

*Past performance does not reflect future results.