Monday Crash Fears Mount as AI Stocks Slide Toward Potential Rebound Levels

Stocks are under pressure as debt concerns shake confidence in the artificial intelligence trade. The important split is that the Nasdaq has broken a major trend line while the S&P 500 still has its broader uptrend intact. I’m watching Nasdaq support around 26,000 on Monday, with 25,000 next if that fails. A lower opening could create a rebound opportunity without repairing the longer-term damage.

In One Minute

The Nasdaq fell as much as 4.5% last week and finished down 2.14%, with heavily indebted AI companies at the center of the selling. CoreWeave’s decline and the rising cost of protection against a debt default show why investors are nervous. Still, I don’t see an immediate October crash as the most likely outcome, and I would consider selective buying if sharp opening declines reach key support. The immediate tests are Nasdaq support at 26,000 and whether the S&P can defend its rising support line into Monday’s close.

The Context

October’s history explains the anxiety: the 1907 panic, the 1929 crash associated with an 89% Dow decline, Black Monday in 1987, and the Friday the 13th selloff in 1989. Add the 7.2% decline that halted trading in 1997 and the 18% weekly loss in 2008, and the month’s reputation is understandable. But that history does not establish that another crash is about to happen.

I’m also cautious about following widespread social media predictions of an immediate crash. My near-term view includes the possibility that officials would attempt to contain disorderly selling, with the approaching midterm elections adding to that expectation. That is part of my reasoning, not a guarantee of intervention or a replacement for watching support. Another decline of 2% or 3% remains entirely possible without becoming a historic crash.

Key Developments

The Nasdaq Composite Index (IXIC) has broken the rising trend line supporting its advance, which raises the possibility that its recent peak could stand for several years. That does not prevent a temporary recovery, especially after the selling already recorded. Around 26,000 is the first support I’m watching on Monday; below that, the next downside area is about 25,000. The Nasdaq 100 is about 8% below its record high, reflecting the pressure on its concentrated technology and AI exposure.

The S&P 500 Index (SPX) looks stronger, remaining about 2% below its record high despite Friday’s 1.1% decline. When the Nasdaq was down 4.5% during the week, the S&P was down roughly 1% or less. Its broader uptrend remains intact, and a possible bullish flag, a pause following an advance, leaves room for another record high toward 8,000. That represents about 3% upside in this outlook, with the upper channel boundary continuing to limit advances.

Friday’s selling brought the S&P directly into a rising support line connecting earlier lows, and the index recovered above it before the close. If Monday opens below that line, I want to see whether buyers reclaim it or whether the index finishes below it. A break beneath the broader flag structure would increase my concern, but that failure has not happened. If the Nasdaq rebounds, the S&P’s broader mix of businesses could help it push higher.

CoreWeave (CRWV) has fallen 34.34% since October 6, roughly 35% over about 10 trading days, including about 12% on Friday. Heavy borrowing is driving concern about whether future earnings will cover debt repayments. The annual premium for credit default protection reached 15%, showing how expensive protection against repayment failure has become. That is a serious warning for the AI trade, even if the stock is approaching a temporary buying opportunity.

The chart has reached a slightly descending support line that has produced several earlier reactions. If shares open lower, I’m watching around $54 and potentially the gap fill at $51, where price would return to an area skipped during an earlier session. Reaching those areas would involve roughly another 10% to 12% decline, depending on the level touched. I would buy selectively there for a rebound, while keeping the debt risk firmly in view.

Micron Technology (MU) has broken below the rising trend line supporting its major advance after earlier pullbacks held within that structure. The next references are a pivot at $786 and deeper support around $735, with a temporary bounce possible before any further decline. I see the longer-term chart as broken, with the possibility that the recent peak could remain a high for several years. A rally toward the broken trend line and higher resistance would interest me on the short side, meaning a position looking to benefit from renewed selling.

Sandisk is testing technical support, so the immediate question is whether buyers defend it. Seagate Technologies (STX) is another name I would consider buying if a sharp Monday opening decline reaches key support, with the aim of trading a recovery. Those are conditional setups, not instructions to buy simply because prices are falling. I see the semiconductor and AI correction as being in its early or middle stages, which leaves room for rebounds without establishing that the larger decline has ended.

Clorox and Nike help explain why the broader market has held up better, with Nike advancing strongly after disappointing earnings. AbbVie (ABBV) has also rallied sharply, but it reached major resistance at $292 on Friday, where two rising trend lines meet. I like that area for a short position looking for a pullback after the strong advance. If technology attracts buyers again, some of the recent strength outside technology could pull back.

Crude oil climbed from about $89 to about $99 last week, keeping it an important influence on the broader market. I’m watching an approaching gap fill, while the chart shows horizontal support below the recent range and rising resistance overhead. I started a small short position on Friday and remain positioned for a decline. That is a reversal trade after a strong advance, rather than confirmation that oil has already turned lower.

Gold is barely holding its rising support line, but buyers are still defending the area that supported several earlier lows. A descending resistance line remains overhead, leaving price between rising support and falling resistance. The immediate question is whether that support holds through the coming week.

Silver bounced on Thursday, but it has already broken below rising support and confirmed the break. The next important test is $55, where horizontal support sits beneath the latest price action. The broken rising trend line and descending resistance remain overhead, so the bounce has not repaired the damage.

Why It Matters

The market’s split matters because weakness in a concentrated AI trade has not yet become an equally severe breakdown across the S&P’s 500 stocks. CoreWeave’s debt concerns help explain the technology selling, while strength elsewhere helps explain the broader index’s resilience. That leaves room for a technology rebound and further S&P upside, even as broken trends keep the longer-term outlook cautious.

Key Details

Market Outlook: Opportunities and Risks

The rebound case starts with buyers defending Nasdaq support around 26,000 and the S&P holding or reclaiming its rising support line. That could allow the S&P to make another attempt toward 8,000 while selected technology stocks recover from sharp declines. CoreWeave’s $54 and $51 areas, SanDisk’s support test, and a Seagate opening decline into support are the specific buying setups I’m watching. Gold holding its rising line and silver defending $55 are the immediate support tests in precious metals.

The risk is that the Nasdaq loses 26,000 and opens the way toward 25,000 while the S&P begins closing below support. CoreWeave’s debt concerns remain unresolved, and Micron’s broken trend means a bounce would not erase the possibility of a lasting peak. AbbVie has reached $292 resistance, where I favor a pullback setup, and I’m already short oil after its sharp rise. Gold’s fragile support and silver’s confirmed breakdown leave both metals with important tests ahead

What to Watch Next

First, I’m watching how futures open and whether Monday brings sharp declines into the support areas already identified. Then I want to see whether the S&P finishes above or below its rising support line, rather than judging the session solely by the opening move. Oil’s approaching gap fill, gold’s ability to hold rising support, and silver’s defense of $55 round out the immediate checks.

Bottom Line

I’m watching a damaged technology trade inside a broader market that has not yet lost its uptrend. Nasdaq support at 26,000 and the S&P’s closing behavior around rising support will help determine whether the next move is a rebound or a deeper correction. Be patient with entries, let prices reach the planned levels, and keep a temporary bounce separate from a lasting recovery.