Nasdaq 100 Forecast: Semiconductor Strength Keeps Bulls in Control

Chips Lead Futures Higher

S&P 500 futures gained 0.4% before the bell Tuesday. Nasdaq 100 futures climbed 0.8%. Dow Jones Industrial Average futures added 96 points, up 0.2%.

Semiconductor stocks are driving the action for a second straight session. The iShares Semiconductor ETF (SOXX) plunged 10% Friday in its worst single-day drop in six years. Monday it surged nearly 6%. The dip buyers are back. The question is whether they are buying a recovery or buying a bounce that runs into sellers higher up.

West Texas Intermediate crude oil futures fell nearly 2% and dropped below $90 a barrel. President Donald Trump suggested a potential agreement between the United States and Iran could come within days. Lower crude oil takes some inflation pressure off the table. That helps the broader market but the semiconductor trade is doing the heavy lifting on its own.

Micron and Qualcomm Are Leading the Bounce

Micron Technology is up another 5% in the premarket. Jumped roughly 10% Monday. Lost nearly 20% over two sessions last week including a 13% drop Friday. That is a round trip that tells you how fast sentiment shifts in this group. Demand for high-bandwidth memory used in artificial intelligence systems has not changed. The selloff was positioning. The bounce is positioning. The fundamentals are sitting in the same place they were before Friday.

Qualcomm climbed nearly 3% before the bell Tuesday. Lost 11% Friday. The VanEck Semiconductor ETF picked up nearly 2% in the premarket. The bounce is not one name. Memory, networking, equipment. The entire group is catching bids. NVIDIA gave the market a fresh headline. Multiyear partnership with SK Hynix to build next-generation memory for artificial intelligence workloads. Marvell Technology earned a spot in the S&P 500 Index. Index inclusion forces passive funds to buy. That is real demand on top of a sentiment bounce. Two catalysts in two days. The dip buyers needed that.

Did Broadcom Break the AI Trade or Just Test It?

Broadcom started the selling Friday. The artificial intelligence revenue guidance fell short. Monday’s 6% bounce told traders what they wanted to hear. The artificial intelligence spending cycle is not broken. The selloff was crowded positioning unwinding, not the market walking away from the thesis. The question going forward is simpler. Which names still have real pricing power. Which ones were just along for the ride. That sorting has already started.

Crude Oil Falls on Iran Deal Talk

West Texas Intermediate crude oil futures dropped below $90 a barrel Tuesday. Down nearly 2%. President Donald Trump said a potential agreement between the United States and Iran could happen within days. That is the first concrete timeline the market has heard. If a deal reduces the threat to shipping through the Strait of Hormuz the entire crude oil risk premium comes out.

Iran halted strikes against Israel on Monday. Warned attacks resume if Israeli operations continue in Lebanon. Israeli Prime Minister Benjamin Netanyahu said the confrontation with Iran and Hezbollah was “not yet over.” The ceasefire is conditional. The deal talk is preliminary. But crude oil is trading the headline right now and the headline says progress. Lower crude oil eases inflation pressure. That gives the Federal Reserve more room. That helps growth stocks. The chain from oil to the Federal Reserve to Nasdaq is direct and it is trading in real time Tuesday morning.

OpenAI and SpaceX Add to the IPO Calendar

OpenAI filed confidentially for an initial public offering. SpaceX is expected to price later this week. Potentially the largest IPO on record. Two artificial intelligence names going public in the same week is a signal. The interest is still there. The risk is the capital it pulls. Institutional accounts setting aside cash for IPO allocations means selling existing positions to free up room. That is not a fundamental call. It is a calendar event. It hits a market still recovering from last week’s semiconductor liquidation.

April wholesale inventories and May existing home sales land Tuesday. Neither one carries the weight of payrolls or the Consumer Price Index. They fill in the edges of the economic picture. Strong numbers push rate cut expectations further out. Weak numbers bring them closer. The Federal Reserve debate runs through every data point right now.

Daily June E-mini Nasdaq-100 Index Futures Technical Analysis

June E-mini Nasdaq-100 Index futures are trading higher for a second session on Tuesday as the technical bounce following Friday’s steep sell-off continues.

The main trend is up according to the daily swing chart. A trade through 30807.75 will signal a resumption of the uptrend. A move through 28663.00 will change the main trend to down.

The first downside target after the change in trend is the 50-day moving average at 27833.51. This followed by a major retracement zone at 26884.75 to 25958.75. Inside this zone is the 200-day moving average at 26012.96.

The short-term range is 30807.75 to 28781.25. Trader reaction to its retracement zone at 29794.50 to 30033.75 will determine the near-term direction. Essentially, it means strong over 30033.75 with 30807.75 the target price. Weakness will develop if 29794.50 proves to be resistance. This means a secondary lower top can form, leading to an eventual change in trend and a break into the moving averages and the major retracement zone.

If you study top formations, you’ll see that the first leg down is usually long liquidation. Professionals don’t try to pick tops, they wait for something to lean on like a main top. Short sellers could try to form a secondary lower top between 29794.50 to 30033.75. That’s why it is the key area to watch.

What to Watch

The chip rebound is now two days old. The SOXX recovered nearly 6% Monday after dropping 10% Friday. The bounce has breadth across memory, networking, and equipment names. The question is whether buyers keep showing up or whether the rally stalls into the 29794.50 to 30033.75 resistance zone where short sellers will be looking to form a secondary lower top. West Texas Intermediate crude oil dropping below $90 on Iran deal talk helps the inflation picture. Any breakdown in those talks reverses the crude oil move fast. OpenAI and SpaceX IPOs pull institutional capital to the sideline this week. That is selling pressure with no connection to fundamentals.

The way I see it, the June E-mini Nasdaq-100 Index futures need to clear 30033.75 to put the 30807.75 high back in play. Below 28663.00 the main trend flips to down. The 50-day moving average at 27833.51 is the first stop. The semiconductor bounce is carrying the tape right now. If chip buyers disappear the rest of the market has no leadership. Iran deal talk and Tuesday’s data can move the needle. Chip stocks decide the direction. That has not changed since Friday.

More Information in our Economic Calendar.