Nasdaq 100 and S&P500: Tech Stocks Sink as Broadcom Miss Hits US Indices

Broadcom Miss Sparks Chip Selloff

June E-mini S&P 500 Index futures dropped 0.4% before the opening bell on Thursday. Nasdaq 100 futures fell 1.1%. Dow Jones Industrial Average futures went the other direction, up 226 points or 0.4% as money rotated out of technology.

Broadcom plunged more than 13% in premarket after quarterly revenue missed the Street. The chip trade that carried this market for months is under pressure this morning. Wednesday’s selling already pushed the S&P 500 into the red for the week after nine straight weeks of gains. Now Broadcom is dragging the sector lower before the cash market even opens.

Daily June E-mini S&P 500 Index Futures Technical Analysis

June E-mini S&P 500 Index futures are in a weak position shortly before the cash market opening on Thursday. The main trend is up according to the daily swing chart, but the two-day pullback has made 7632.25 a new main top. The main bottom is 7354.25. A trade through this level will change the main trend to down.

The main range is 7354.25 to 7632.25. Its retracement zone at 7493.25 to 7460.50 is the first downside target zone. Since the main trend is up, buyers are likely to show up on the first test of this area. If the selling is strong enough to take out 7460.50 then start watching for an acceleration to the downside because there is no major support until 7354.25.

The minor trend is up. A trade through 7515.00 will change the minor trend to down. This will shift momentum to the downside.

Last Friday’s close was 7595.75. The benchmark index is now trading lower for the week after posting a record high on Monday. This puts it in a position to form a potentially bearish weekly closing price reversal top. If formed on Friday’s close and confirmed next week, we could see the start of a major correction.

Broadcom Revenue Miss Triggers Sector Selloff

The damage spread across the entire chip space. Arm Holdings, Micron Technology, and Marvell Technology each dropped about 6% and Super Micro Computer is down roughly 7%.

Advanced Micro Devices and Intel are both lower with AMD off nearly 5% and Intel down around 4%. An $80 million revenue miss from one company repriced the whole sector before the cash market even opened. That is what happens when the AI hardware trade is priced for perfection.

Iran Strikes Kuwait Airport

Iran struck Kuwait International Airport early Wednesday. A day earlier U.S. Central Command intercepted Iranian ballistic missiles and drones and carried out strikes on Iran’s Qeshm Island. The conflict keeps expanding. Every new headline adds to the risk sitting on top of this market. Nine weeks of gains ran through geopolitical noise without flinching. That is getting harder to do when the strikes are hitting airports and the military response keeps escalating.

Stocks in the News

CrowdStrike dropped about 10% in premarket after second-quarter guidance came in soft. The company projected revenue around $1.44 billion but the earnings outlook disappointed. Palo Alto Networks and Fortinet are both lower in sympathy. When the leader in cybersecurity guides down the rest of the group gets repriced with it.

PVH Corp. cratered roughly 22% and is the worst performer of the morning. The parent company of Tommy Hilfiger and Calvin Klein beat first-quarter earnings estimates but reiterated full-year guidance instead of raising it. A beat with no raise at these valuations gets punished hard.

Five Below dropped about 11% despite issuing a stronger-than-expected outlook. The stock had a big run coming in and the market sold the news. Petco fell about 12% after projecting second-quarter adjusted EBITDA below expectations.

C3.ai is one of the few names working this morning. The stock added about 1.4% after fourth-quarter results beat on both the top and bottom line. Adjusted loss of 33 cents per share came in ahead of the 37-cent loss the Street expected. Revenue hit $52 million versus the $50 million estimate.

Bitcoin fell approximately 5% and pulled the crypto names down with it. Robinhood declined about 2%. Coinbase lost around 1%. Strategy dropped roughly 3%.

What to Watch

Broadcom’s 13% premarket decline is testing whether the chip trade that carried this market can absorb a miss and keep going. The VanEck Semiconductor ETF is down more than 3% and the selling is broad across the sector.

The Dow gaining 226 points while the Nasdaq drops 1.1% tells you money is rotating out of tech, not leaving the market. The selling is inside semiconductors right now and that keeps the pullback contained.

It becomes a different session the minute software joins the selling. Iran striking Kuwait International Airport is the other risk. Nine weeks of gains ran through every geopolitical headline. Strikes hitting civilian airports and an escalating military response make this one harder to run through.

June E-mini S&P 500 Index futures are trading below last Friday’s close at 7595.75. That puts the market in position to form a weekly closing price reversal top if it finishes below that level on Friday.

A trade through 7515.00 changes the minor trend to down and shifts momentum to the downside.

The first major support zone is 7493.25 to 7460.50. The main trend is still up so buyers are expected on the first test. If sellers push through 7460.50 the next support is the main bottom at 7354.25 and there is nothing in between.

More Information in our Economic Calendar.