Chips Crashed, Then AI Struck Back: The Nasdaq Levels to Watch
Chip stocks had their worst week since April 2025 (SOX −11.4%) and the Nasdaq fell about 5% from its early-October peak to 26,140. Then chips snapped their losing streak and after-hours earnings went 2–1 for AI. A close above 26,600 opens 26,713 and 27,000; below 26,140 the bounce fails.
Post-close market review. Educational content; it describes levels on the chart, not a recommendation to trade.
Last week: a brutal week for tech
- The chip index (SOX) fell 11.4 %, its worst week since April 2025, and extended its losing streak to eight days.
- AI-spending fears hit cloud and memory stocks hard, and a hotter-than-expected US CPI report did not help.
- The Nasdaq Composite slid about 5 % from its early-October peak (a record close of 27,599.79 on 6 October) to 26,140.03 on Friday 16 October.
Then the fightback
- Monday 19 October: chips snapped their losing streak, and the Nasdaq rose 1.1 %.
- Tuesday 20 October: flat at about 26,425, with Meta still sliding.
After-hours scoreboard: AI 2–1
| Company | After hours | Why |
|---|---|---|
| SpaceX | +8 % | AI revenue up 830 % |
| Supermicro | +14 % | raised guidance on AI demand |
| Netflix | −5.6 % | weak Q4 guidance, ad revenue forecast cut |
| Tesla | reports Wednesday after the close | sets the mood for big tech |
Levels on the chart (1-hour)
| Level | What it is |
|---|---|
| 27,000 | target 2 |
| 26,713 | 15 October close: target 1 |
| 26,600 | the trigger: a close above it |
| 26,425 | Tuesday's close |
| 26,140 | Friday's close: the bounce fails below it |
The plan, in three lines
- Trigger: a close above 26,600 → 26,713, then 27,000.
- Invalid: below 26,140.
- Until 26,600 breaks, it is a bounce, not a bottom.
What moves it next
- Tesla earnings, which set the mood for big tech.
- Oil near $110 and tension with Iran around the Strait of Hormuz.
- The Fed decision on 27–28 October.
The lesson
One good night of earnings doesn't make a bottom. After a week like the last one, the first bounce is often sold. Wait for the close above 26,600 before calling the low.
Stocks and index CFDs involve significant risk of loss. Educational content, not financial advice.