Last week former Anthropic employee Jacob Coxon posted on X that he quit his job because he was afraid that Anthropic and other AI companies were going too fast in building out something that they wouldn't be able to control in the future. This sparked discussion over AI fears over the weekend from several other Anthropic and OpenAI employees as well as high profile figures including Elon Musk that agreed with Coxon. After this happened, Anthropic CEO Dario Amodei also came out and said that they need to pace the development of AI and are taking steps towards doing so. Over the weekend, OpenAI CEO Sam Altman also announced that they would be scrapping their plans to IPO this year due to these concerns.
The AI fears over the weekend led to a sell-off in markets today, most notably in semis, as SOXX fell 5.6% while SMH lost nearly 5%. The Nasdaq however did recover, closing down just 0.56% for the day after it had been down as much as 1.3% at the lows. The Russell was a slight outperformer today as there was a bit of a rotation into small caps, but it also closed down 0.40%. The 10 year treasury yield briefly topped 5% for the first time since 2023 as oil continued to climb which did add some pressure on small caps. Meanwhile the S&P fell 0.48% and the VIX settled up about 8% at $17.10. What's notable about the VIX today is that it closed in backwardation which has historically been a signal of further volatility and weakness in markets.
For tomorrow, the Nasdaq did hold just above its primary daily downtrend support again today, so it doesn't start any new daily ranges for tomorrow. Its primary downtrend (white) will continue to be the first resistance to watch on a rally attempt around 26,225. If it breaks through, the last resistance to watch will be around 26,750 from its prior uptrend (orange).
On a continuation of the pullback, its primary downtrend (white) will also be the first support to watch around 25,940. If it breaks through this time, the last daily support for tomorrow that would likely come into play will be from its prior downtrend (blue) around 25,725.
The S&P also traded within its primary downtrend again, so it also doesn't start any new daily ranges for tomorrow. The only resistance that likely comes into play on a bounce would be from its prior uptrend (orange) at 7,695-7,700.
On a continued pullback, the first support to watch will be from its prior sideways range (purple) which it bounced near today. That will be support at about 7,588 tomorrow. If it breaks through this time, it will have several more daily supports just below that at 7,578-7,579 (green), 7,571-7,572 (teal), and finally its primary downtrend (white) at about 7,565.
The Russell 2000 held its first support today and remains well within its big primary downtrend, so no new daily ranges get started for it tomorrow. Its primary downtrend (white) will likely be the only resistance to watch on a rally tomorrow at 2,959-2,960.
On another pullback, its prior downtrend (blue) which it held today and last Thursday, will continue to be the first key support level to watch. That will be at 2,884-2,885, just below today's low. If it does break this time, the next (and likely last) daily support that comes into play tomorrow would be from its next downtrend (yellow) at about 2,845.
