Nasdaq Index: Tech Stocks Rebound as SpaceX Shorts Face Earnings Test

Chip Rebound and SpaceX Lead Nasdaq Higher

The Nasdaq is leading Wall Street at the mid-session Tuesday with semiconductors bouncing for a second day and SpaceX reversing a seven-session slide ahead of its first earnings report as a public company on August 4.

The chip group is still in bear-market territory after last week’s selling but buyers are stepping back into the damage and memory names are running hard. Oil above $90 on fresh U.S. strikes in Iran is the weight on the other side of this trade and software names are not participating after Morgan Stanley cut ratings across the group.

At 15:40 GMT, the Nasdaq Composite is trading 25,834.44, up 326.37 or +1.28%. The S&P 500 Index is at 7,500.62, up 57.34 or +0.77%. The Dow Jones Industrial Average is up 332.37 or +0.64% at 52,171.63.

The Nasdaq has the strongest bid because chips are doing the work. The Dow is getting help from early earnings beats. The S&P 500 is riding both.

Daily Nasdaq Composite Index Technical Analysis

The Nasdaq Composite is edging higher at the mid-session on Tuesday. The index got off to a promising start, opening at 25772.55, but momentum has stalled at 25855.22. The bounce from the recent bottom at 25250.62 has been impressive, but the index is still in a down trend so the recovery could be a labored event.

The major upside target is the retracement zone at 26085.30 to 26346.05. My work suggests that this area is what’s separating investors from an eventual breakout toward the record high at 27190.21 and a retest of the three higher bottoms at 25250.62, 25014.96 and 24980.38.

The 50-day moving average will also have some say in whether there is a breakout to the upside or a resumption of the downtrend. It comes in at 26134.30 today.

Hourly SpaceX Technical Analysis

SpaceX surged the first hour of trading on Tuesday. After reaching an all-time low the previous session at $119.69, shorts covered aggressively after Elon Musk told bearish traders they were taking a big risk by shorting the stock.

The first obstacle for bottom-pickers is to fill the recent gap at $130.30 to $131.01. Once investors recover this area enough to form a solid support base then new buyers could take a shot at the 50-hour moving average at $133.58. Right now, this indicator is controlling the downtrend. Overcoming it, however, may be an indication that new buyers are returning.

Once new investors recover this trend indicator, the next objective will be getting back to the low of the IPO day at $149.80.

Chip Bounce Needs Alphabet to Confirm

The Philadelphia Semiconductor Index is up 5.75% for a second session after Friday’s close confirmed a decline of more than 20% from the late-June record high. The group still carries a year-to-date gain near 72% but last week’s selling repriced the AI trade fast and two sessions of buying does not settle the valuation argument.

Alphabet earnings later this week are where this rebound either finds real support or runs out of air because the market wants to hear that AI capital spending plans are holding through the second half. Intel fills in the demand picture from the production side.

SpaceX Shorts Keep Growing Into Earnings

SpaceX is up about 7% near $128 Tuesday, snapping a seven-session decline that took the stock below its $135 IPO price. The bigger story is the short position that has grown to roughly 206 million shares, about 32% of the publicly tradable float and around $25 billion in bearish exposure according to S3 Partners. That was 29% last week and only 5% to 7% a month ago.

The company’s first quarterly report lands August 4 and that number determines whether the short crowding becomes a squeeze or a vindication. Musk warned on X that the survival probability for firms holding major SpaceX short positions over time is very low. The bears are trading valuation risk and future lock-up expirations. The bulls are trading Starlink expansion and launch-service dominance.

Crude Above $90 Keeps Rate Risk Alive

Brent is at $90.92 and WTI at $84.96 after fresh U.S. strikes on southern Iran while mediators floated a proposed 10-day ceasefire. Higher crude keeps the rate question alive and the Nasdaq is the index that pays for it if oil does not pull back. The market is getting two stories at once with chips trading recovery while oil trades an expanding war.

Stocks in the News

SanDisk is up about 10.2% at the mid-session, leading the semiconductor recovery. Western Digital and Micron Technology are both running between 7.7% and 10.2%. Adobe, Intuit, Workday and Salesforce are all lower after Morgan Stanley cut ratings and price targets across the software group. The Nasdaq recorded 64 new 52-week lows against only 22 new highs despite Tuesday’s rally, keeping the recovery narrow and concentrated in chips.

What to Watch

The chip rebound is two sessions old and needs this week’s earnings to push it further. Alphabet is the report that matters most and Intel adds the production side of the story. SpaceX has a different timeline with its August 4 number sitting in front of a short position that keeps growing and both sides need the first quarterly report to prove their case. Oil above $90 is the variable that ties all of it together because another push higher in crude reprices the rate outlook and the growth stocks leading Tuesday’s rally will feel it first.

The Nasdaq opened strong but momentum stalled and the index is still in a downtrend with the retracement zone and 50-day average overhead. SpaceX needs to recover the gap and reclaim the trend indicator before the bounce turns into anything more than short covering off the low. The recovery is real but it is narrow and it has not earned the benefit of the doubt yet.

More Information in our Economic Calendar.