Too Quiet? AI Chip Curbs Ignite Selling—Can Bulls Bounce Back?
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S&P, yesterday's close: Settled at 5428.25, down 12.50
NQ, yesterday's close: Settled at 18,960.25, up 25.50
Things were quiet yesterday, too quiet. That quickly changed after the closing bell when Washington announced new export controls on AI chips, limiting sales to China. This marks a $5.5 billion hit to NVDA's revenue, and the stock is down more than -6% premarket. While the sector is under pressure, AMD is the other seeing the brunt of the pain -7% on the news. Also, ASML missed revenues and is -4%. We look to earnings from TSM overnight tonight.
A deluge of economic data out of China last night was broadly positive with Industrial Production, Fixed Asset Investment, and Retail Sales topping estimates. GDP y/y beat at 5.4% versus 5.2%, but q/q was light at 1.2% versus 1.4%.
E-mini S&P and E-mini NQ futures are under pressure this morning, breaking below Friday's settlement at 5391, a level that buoyed waves of selling Monday in the E-mini S&P. This mark stands as our Pivot and point of balance, and it will be critical for the bulls to not let the tape create separation as selling could invite more selling in the near-term. Our Pivot and point of balance in the E-mini NQ comes in at…
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