By the end of yesterday, US stock indices closed mixed. The S&P 500 fell 0.59%, while the Nasdaq 100 dropped 1.46%. The Dow Jones Industrial Average gained 0.02%.

The sell-off in Wall Street's tech giants rippled across global markets. Europe's Stoxx 600 index slipped 0.2%, closing just below its all-time high on Tuesday. Shares of ASML Holding NV declined 1.2%. Futures on the Nasdaq 100 and S&P 500 dropped 0.3% after the Nasdaq suffered its second-largest fall since April. Asian equities also retreated by 0.6%.

Investors cut back positions in stocks that had long led the rally. This happened amid growing concerns that the rally, which began in April, had gone too far too quickly. Many leading analysts point to overbought signals in key indicators and the need for a healthy correction to support further sustainable growth.

The reduction of positions extended beyond technology, which had been the main driver of gains, to other sectors including consumer and energy. Investors locked in profits from the spring rally and shifted portfolios toward more defensive assets such as bonds and safe-haven stocks.

This week, that momentum will be tested again as attention turns to Jackson Hole, where Federal Reserve Chair Jerome Powell is scheduled to speak on Friday. Traders increasingly believe Powell may hint at a September rate cut.

VanEck noted that with valuations near record highs, traders and hedge funds tend to retreat, and the latest decline was seen as a sign of caution and profit-taking before Jackson Hole.

In the UK, money markets largely maintained expectations of a Bank of England rate cut. The odds of a quarter-point reduction this year stayed near 40%, after July inflation rose for the second month in a row.

Technical outlook for S&P 500:The immediate task for buyers today is to break through the nearest resistance at $6,403. A move above this level would open the way for a push toward $6,414. Another key objective for bulls is to secure control over $6,428, which would strengthen buying positions. On the downside, if risk appetite fades, bulls must step in around $6,392. A break below would quickly push the index back to $6,385, with the door then opening toward $6,373.