New York, May 18, 2026, 11:01 (EDT)
- Nasdaq-100 dropped under 29,000 on Monday, breaking below a support level many chart watchers had been watching.
- Traders turned their attention to rates, oil and chip stocks keeping up the run after a sharp AI-driven rally.
- Nvidia’s earnings coming Wednesday are looking like the next key hurdle for the trade.
Nasdaq-100 broke below 29,000 on Monday, losing ground as tech stocks retreated again. The index was last quoted at 28,880.80, down 0.84%, according to Nasdaq data, and slipped under what many market notes had flagged as a key support line. Some technical analysts and investors had already voiced caution about chip stocks looking stretched.
The break stands out since the rally still looks narrow. Most gains have come from artificial-intelligence and chip stocks. That group is now large enough to sway the broader market when traders shift their view.
Bonds are still the big weight on growth stocks. The 10-year Treasury yield pulled back to 4.573% Monday after hitting 4.631% earlier. Brent crude dropped almost 2%, according to Reuters, which let stocks catch a break after last week’s inflation worries.
Nasdaq-100 is getting a lot of focus around the 29,000 mark, DailyForex analyst Christopher Lewis said Monday. Staying above that level might help the index keep pushing higher, he wrote. Lewis added that higher U.S. rates can take some shine off tech stocks. Investors often turn to safer options when yields rise, pulling some cash from risk assets.
InteractiveCrypto’s Joanna Newman pointed to 29,000 as initial support and 28,000 just under that. She put resistance close to the previous high near 29,630 and at the 30,000 level. Her note said the relative strength index, or RSI, was at 75.81—typically seen as an overbought reading.
Yields are driving the story right now, said Robert Pavlik, senior portfolio manager at Dakota Wealth, in comments to Reuters. Pavlik pointed out that rising rates take a bite out of future earnings for AI-focused growth names by cutting their present value.
The Nasdaq-100 tracks big non-financial stocks trading on the Nasdaq. It covers some of the largest tech, retail and biotech companies. According to Nasdaq, the index holds 100 of the largest non-financial companies, both U.S. and international, ranked by market cap.
Semi stocks have been on a run, but there’s a tight field at the top. Reuters said last week the Philadelphia Semiconductor Index gained 64% since late March. Micron Technology and Advanced Micro Devices have both more than doubled. Intel has almost tripled. Nvidia is still the bellwether, and its report is out Wednesday.
Doug Collins, a Seeking Alpha contributor, said last week the Nasdaq is up about 27% from its March lows, with much of that run coming from semiconductor names. He warned that hyperscaler free cash flow—money left after big cloud firms’ capex—is still under pressure, and sees this as a threat to the AI spending cycle.
Investors are raising their bets on a Fed rate hike by January after higher-than-expected inflation numbers, Reuters said Friday, citing CME FedWatch data. The odds are close to 60% for a hike, according to the CME tool, which follows probabilities taken from 30-day Fed funds futures, contracts that reflect expectations for U.S. rates.
Stocks dropped Friday after hitting AI-driven highs. “The market had gotten way ahead of itself,” Kenny Polcari, chief market strategist at Slatestone Wealth, told Reuters, calling it a “momentum AI trade.” The Nasdaq Composite ended down 1.54% and snapped a six-week winning run. Reuters
The warning isn’t final yet. If yields keep falling or Nvidia posts another solid quarter, dip buyers might try for another run at 29,630 or even 30,000 on the Nasdaq-100. But if rates tick higher again or chip names stall, the index could test the 28,000 area next.
