Tech Is Paying Back Gains; XLP Still Needs to Clear $84.80
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The Nasdaq fell, but the whole market did not
Technology was under pressure on Thursday, but the session did not look like a broad market breakdown. The Nasdaq-100 fell 1.39%, and the Nasdaq Composite lost 1.25%. The S&P 500 slipped 0.47%, while the Dow added 0.10%. Some 339 S&P 500 constituents advanced, and the equal-weight index gained about 0.6%. Eight of the 11 sectors rose. Technology fell nearly 2%, while health care and utilities were down only about 0.5%. The weakness was concentrated in large technology names rather than spread across the market.
Initial jobless claims came in at 197,000, below the 200,000 forecast. Continuing claims were 1.716 million, slightly above expectations but still relatively low. Fed Governor Christopher Waller said inflation remained too high. He also pointed to energy shocks and AI investment as potential sources of price pressure. The labour market did not suddenly weaken, leaving inflation and the rate path as key questions for investors.
Consumer staples are leading, but XLP needs confirmation
The Consumer Staples ETF ($XLP) rose 2.11% and closed near $83.40 on stronger volume. That is a powerful rebound, but it is not yet a confirmed reversal. The first resistance area on the chart sits near $83.60. A clearer structural confirmation would come above $84.80. If XLP clears that level and holds it, the sector’s decline may be nearing a temporary low. If it stalls and fades, treat the move as a rebound instead.
The rotation also puts earnings expectations back in focus. Companies that have already fallen and carry low expectations may have an easier bar to beat. But that setup still needs actual results to confirm it. A stock is not a buy just because it has dropped a lot. For now, watch whether XLP can hold its rebound and clear $84.80 before calling a broader consumer-staples reversal.
Semiconductors pulled back, but not every support level has failed
Semiconductors lagged the market. The Philadelphia Semiconductor Index and the iShares Semiconductor ETF ($SOXX) each fell about 3.35%, while the VanEck Semiconductor ETF ($SMH) dropped 2.84%. Two developments weighed on the group. Samsung Electronics reported third-quarter revenue and operating profit below expectations, pressuring memory stocks before the U.S. open. Later, a Financial Times report about OpenAI’s annualized revenue renewed questions about how quickly AI demand can turn into revenue. Other coverage suggested that the $50 billion and $70 billion figures could use different calculation methods. That report may have affected sentiment, but it does not prove that AI demand has suddenly weakened.
The more durable questions remain capital spending, cash conversion, financing guarantees, and whether revenue can keep pace with spending. On the chart discussed in the video, SOXX pulled back toward $567 but remained within a $555–$577 support area. A break below $486 would pose a much larger threat to the current higher-high structure. SMH’s watch area is $586–$613; a break below $557 would be a stronger sign of structural weakness. Both ETFs fell on heavier volume, so even a rebound may need time to consolidate rather than snap straight back.
Individual names still need their own levels. AMD’s first area to watch is around $605–$626, with stronger support near $562. Nvidia ($NVDA) has a medium-term support zone around $219–$232. Broadcom ($AVGO) remains tied to whether growth estimates hold. The chart’s longer-term watch zone is $324–$365, with $324 as the level that would challenge the setup. Financing and guarantees tied to AI infrastructure can also add credit and balance-sheet risk. Revenue growth alone is not enough; cash flow and capital intensity matter too.
Scale into SPY differently from QQQ
The S&P 500 ETF ($SPY) and Nasdaq-100 ETF ($QQQ) are no longer the same trade. Equal-weight S&P performance remains relatively firm, so gains across more constituents can offset some weakness in mega-cap technology. QQQ is more concentrated in technology and semiconductors. It can still fall even when other sectors are rising, so better market breadth does not automatically make the Nasdaq safe.
The chart’s long-term watch zone for SPY is around $759–$776, with a more attractive risk-reward setup below $753. These are the speaker’s trading zones, not guaranteed targets. For QQQ, the longer-term watch area is $700–$728. The current $737–$746 area was considered too aggressive for new entries. If QQQ breaks below $700, avoid catching the knife; the next zone to watch is below $664. For the Technology Select Sector SPDR Fund ($XLK), the two areas are $182–$188 and $171–$177.
The takeaway is straightforward: money rotated away from expensive technology into consumer staples and other sectors, while semiconductors absorbed earnings and financing concerns. The transcript did not show every major structure breaking at once. Wait for XLP to clear $84.80, or watch how SOXX and SMH react at their support zones. Do not chase without confirmation, but do not declare the AI cycle over after one rough session either.