S&P 500 Breakout Holds as Semiconductor Weakness Builds

The market opened strongly after the Producer Price Index came in weaker than expected. Stocks moved higher, the 10-year yield fell, and gold and silver rallied. But that momentum faded. Technology finished weaker, semiconductors underperformed, and the broader market held up better.

The S&P 500 Index (SPX), tracked by the SPDR S&P 500 ETF Trust (SPY), is still in a confirmed breakout. It broke the declining trend line on July 9, confirmed it on July 10, and is now separating from that level. The next step is a close above the July 10 candle. The lower wicks show buyers are defending the breakout, but we still need follow-through.      The Invesco QQQ Trust (QQQ), which tracks the Nasdaq 100 Index (NDX), recovered sharply from its intraday low but remains rangebound. Resistance is near $733.86, with support near $704.32.

The Cboe 10 Year Treasury Note Yield Index (TNX) fell after the inflation data, then recovered toward the trend line it broke on July 13. The key level is 4.55%. Holding above it could keep pressure on growth stocks. Failing there would help risk assets.

Gold Futures (GC) gave back its entire rally after the report and remains under pressure, with support at $3,886. Silver Futures (SI) is testing resistance near $57.76. It needs to clear the trend line and the July 6 pivot. Otherwise, support is $55.09, then $49.86.

West Texas Intermediate Crude Oil Futures (CL) remain below the $81.33 resistance. Further geopolitical disruption could bring $85.75 into play. Natural Gas Futures (NG) need to break their declining trend line. Above it, the next level is $3. If it fails, watch $2.75. The bigger concern is semiconductors. The VanEck Semiconductor ETF (SMH) fell 1.59%. A move above $605.10 would improve the setup, while renewed selling could expose $552.66.

Dell Technologies Inc. (DELL) fell 9.8% and formed another major weekly long upper wick. The June 1 wick was followed by a decline of more than 20%. After a roughly 300% advance, more downside or sideways movement is possible. The key breakdown level is $378.66, with support at $332.61. Sandisk Corporation (SNDK) fell 8.12% and is sitting above a head and shoulders neckline near $151.36. Daily closes below it would target below $70, roughly a 50% decline.

Micron Technology, Inc. (MU) also closed below a head-and-shoulders neckline. The measured target is $52.90, compared with a current price near $90.04. The stock recently traded near $120, while analyst targets reached $250 and $225. A daily close back above the neckline would negate the breakdown. The iShares Semiconductor ETF (SOXX) has a similar setup. A break below $533.74 would bring support just under $500 into focus.

PayPal Holdings, Inc. (PYPL) jumped 17.2% after reports of a possible $60.50 per share offer from Stripe, Inc. and Advent International. The deal is not confirmed. Resistance is near $61, with support near $52. Chipotle Mexican Grill, Inc. (CMG) failed to hold inside its declining channel. Support is near $32.56, with a possible recovery toward $34.93. Nebius Group N.V. (NBIS) has tested support for six consecutive sessions. A break below $196.16 could send it under $170.

Bitcoin (BTC) remains near the lower boundary of its channel. Resistance is $67,200, followed by just under $71,000.

The message is straightforward: the S&P 500 breakout is intact, but leadership is weakening. SPX needs to close above the July 10 candle, QQQ needs to escape its range, and semiconductors need to reclaim resistance. Until then, the market looks stronger on the surface than it does underneath.