U.S. stocks slide as chip and AI stocks extend selloff

U.S. equity markets remain under pressure, led by renewed weakness in semiconductor and AI-related stocks. The Dow Jones futures fall 97 points (-0.20%), while the S&P 500 futures slide 67 points (-0.97%) and the Nasdaq futures drop 594 points (-2.33%). Selling has been driven by AMD’s cautious outlook and broader concerns over AI earnings momentum, which have weighed on major chip and software names, keeping risk appetite fragile across the technology sector.

Dow Jones Industrial Average (INDU)

DJIA index experience bearish rejection but overall there is not much change to the sideways situation. The index is consolidating below the 50,000 level and will attempt to resume the bullish movement. For now, if the bearish movement accelerating, then there is chance for the index to revisit the swing low at 48,459. We maintain bullish outlook as long as the structure stay bullish with higher high and higher low.

Advanced Micro Devices (AMD)

AMD share prices gapped down after today’s earnings result, which is topped analyst’s estimate. However, the company gave lackluster forecast which trigger the sell-off. Technically, we might have a double bottom pattern with theoretical target around $121.48 or near the 78.6% Fibonacci Retracement level. It might happen, but the share prices need to close below the daily SMA 200, close the October price gap and turn the trend bearish which is less likely to happen from fundamental analysis side as AI sector is booming right now.

Traders will observe the reactions near the daily SMA 200 and the gap close level. If there is strong bullish reactions, traders could enter long positions assuming that the price will return to the top.