S&P 500 Holds Up Despite Double Digit Losses in Major Tech Stocks

Technology stocks are falling sharply after disappointing earnings, while the S&P 500 is holding up much better than those individual losses suggest. The tension here is between severe damage in major companies and a broader market that still has a bullish structure. I am watching S&P support between 7,620 and 7,580, because a break below that zone would change the picture.

In One Minute

This is a heavy earnings selloff in technology, with Alphabet, Fortinet, and ServiceNow taking substantial hits while Caterpillar adds pressure outside the sector. Money rotating into safer stocks helps explain why the S&P 500 is down only modestly despite those losses. Several stocks are approaching meaningful support, but the opportunity depends on reaching the right prices rather than buying simply because something has fallen. For the broader market, 7,820 remains resistance, while 7,620 to 7,580 is the support zone that matters most.

The Context

Inflation matched expectations, but every reported measure increased from the previous month. Core Personal Consumption Expenditures inflation came in at 3.1% year over year and 0.3% month over month. Headline inflation was 3.6%, matching the 3.6% forecast, with a monthly increase of 0.5%. So the numbers avoided an upside surprise, but inflation is still moving higher.

GDP was slightly stronger than expected, with AI capital spending doing much of the work while consumers and other parts of the economy struggle. Trillions of dollars flowing into that investment cycle are helping keep overall growth positive. Jobless claims were around 194,000, essentially matching expectations and remaining near their established range.

The Federal Reserve held interest rates steady and delivered a message that was neither strongly hawkish nor strongly dovish. With the midterms less than a week away, that neutral approach avoided a major market reaction that could draw political criticism. The next rate increase is expected in December.

Key Developments

S&P 500 futures are down about 20 to 25 points from yesterday’s close, roughly one-third of 1%. Nasdaq e mini futures are taking a larger hit, falling more than 300 points from a close around 30,000 and pointing to an opening decline of approximately 1%. That is meaningful technology weakness, although the index decline is still much smaller than the losses in several individual companies.

The S&P 500 has risen for three consecutive sessions and remains in its bullish zone despite the softer opening. Near-term resistance is around 78.20, with 7,820 also marking the daily resistance reference. Above that, an ascending trend line now sits above 8,000, offering a potential move of approximately 4% into year-end. Major support is between 7,620 and 7,580, a 40-point range, and a break below the lower boundary would represent a major structural breakdown.

For now, the broader chart still resembles a bull flag, a pause after an advance that continues to favor further upside. Rotation helps explain that resilience: managers can move capital away from struggling technology companies and into safer names while remaining invested. That does not establish whether retail investors are leaving, but it helps explain why sharp individual losses have not produced a comparable index decline.

The 10-year yield has shown little immediate reaction to the Fed. Its chart is beginning to form a bear flag, pointing to a possible move lower. That raises the possibility of a weaker jobs number when nonfarm payrolls arrive next week, although the employment report still has to confirm that possibility.

Microsoft rallied after earnings, held most of its gains, then weakened this morning before attracting buyers again. That renewed buying is helping support the S&P before the opening. I am not looking to short the stock around $550 because it already traded above that trend line after hours.

Another test would be approximately the fourth contact with that line, leaving roughly a 50% chance of a breakout. That does not offer enough of an advantage for this trade. The potential short area I would consider is much higher, around $620 over the next week or two, along an ascending trend line that could move higher with time.

Alphabet is down more than 10%, reaching approximately 12% in the morning session. More than $400 billion in market value disappeared after yesterday’s close, with the loss approaching $500 billion as selling continued. Weak advertising revenue is the main concern, alongside the possibility that users asking AI tools for recommendations are moving away from traditional search. Gemini gives Alphabet a way to adapt, and I think that adjustment eventually happens.

The main swing trade zone is $274 to $270, with additional support around $261. A 50% Fibonacci retracement, a gap fill, a previous low, and an ascending trend line come together around this area. Individual levels can offer day trading opportunities, while accumulating within the broader zone is a separate swing trade setup. The wider $260 to $270 area looks increasingly interesting for a quality company at a lower price.

Fortinet is down approximately 28%, approaching a 30% decline. Before earnings, the chart had formed a bearish consolidation resembling a bear flag and an inside bar, meaning trading stayed within the previous bar’s range. The sharp earnings decline has now broken that pattern lower. I am watching $117 to $115, where an ascending trend line and a previous turning point create an interesting support area if the stock reaches it today.

ServiceNow is down approximately 20%, bringing concerns about software as a service businesses back into focus. The worry is that AI could let customers build software they currently pay these companies to provide, and selling is spreading across software stocks. With ServiceNow around $120, support at $114 to $112 is not far away. That area lines up with the 61.8% Fibonacci retracement and creates a potential buying opportunity after a substantial decline.

Marvell (MRVL) is down about 10% on word that it may buy Lumentum (LITE), rather than because of an earnings announcement. Lumentum has a market capitalization of approximately $86 billion, making this a substantial potential acquisition with significant dilution concerns for Marvell shareholders. Marvell is testing a major trend line that may break. I do not have a compelling immediate entry, although a move toward $204 would get my attention.

Caterpillar is down roughly 10% to 12%, having already fallen well below its $1,075 high. The stock is now reaching important technical support around $625 to $623. There is another support level near $600, putting the shares into an area where the chart becomes more interesting.

Eli Lilly is one of the few stocks rising after good earnings. I am watching a significant trend line near $1,350. The question today is whether the stock starts to pull back as it reaches that resistance.

Gold is falling alongside technology stocks, rather than providing the protection investors might expect. Its recent August peak came around the same time many technology stocks topped. That overlap matters because some buyers were chasing gold’s momentum and potential gains rather than buying purely for safety.

When those investors become nervous about technology, they may also sell gold as they reduce exposure more broadly. That helps explain why gold is behaving like an asset that moves with investors’ appetite for risk. Eventually, a bottom could allow its more familiar defensive behavior to return, but that shift has yet to take hold.

Silver is now within approximately $2.50 of $50 an ounce after previously trading above $100 and $80. The outlook has been for a return to $50 or below, and that level is getting close. Below $50, I am interested in buying, with the next support area around $45 to $46. That lower range is where I would begin accumulating.

Natural gas is starting to come down. The next technical support reference is around $247. Based on the current price action, a test of that level looks increasingly likely.

Digital Assets and Crypto

Bitcoin looked promising yesterday after closing back around $81,000, but it has been rejected again today. Minor support is building around $79,400, where the lower trading area also overlaps previous highs. That gives buyers an immediate level to defend, but the recovery still depends on getting back above $81,000.

I want to see Bitcoin reclaim that level and establish itself above it. A brief move into resistance is not enough when the next session gives it back. Without that recovery, the odds again heavily favor the 75.5 downside reference.

Why It Matters

AI spending is supporting economic growth while AI competition is also raising questions about advertising and software revenue. That makes this earnings selloff more complicated than a collection of isolated disappointments. The same technology driving investment is challenging parts of the business model for companies facing heavy selling.

The other important distinction is between individual stock damage and overall market structure. Rotation can keep the S&P relatively stable even when several large companies are falling sharply. Gold’s weakness alongside technology also shows that investors seeking to reduce exposure can sell across assets rather than automatically move into a traditional defensive holding.

Key Details

Market Outlook: Opportunities and Risks

The broader opportunity remains a continuation of the S&P bull flag, with a move through 7,820 opening the path toward the ascending trend line above 8,000. In individual stocks, Alphabet, Fortinet, ServiceNow, and Caterpillar are approaching the support areas that make their declines worth watching. Those are distinct setups, with Alphabet offering both individual day trading levels and a broader accumulation zone for a swing trade.

Silver also offers a conditional buying setup below $50, with accumulation focused on $45 to $46. Bitcoin needs to recover and establish itself above $81,000 before its recent improvement becomes more convincing. These opportunities depend on price reaching or reclaiming the relevant levels.

The principal market risk is a break below the S&P support zone, particularly its lower boundary at 7,580. Advertising weakness, AI pressure on software businesses, and potential acquisition dilution remain the specific concerns behind several technology declines. Microsoft near $550 does not offer an attractive short setup, while the higher ascending line around $620 could become interesting. Eli Lilly approaching $1,350 also deserves attention for a possible pullback into resistance.

What to Watch Next

Next week’s nonfarm payrolls report will help test whether the developing bear flag in the 10-year yield is pointing toward weaker hiring. December remains the expected timing for the next rate increase. Until then, the immediate market test is whether the S&P holds 7,620 to 7,580 and can eventually challenge resistance at 7,820.

For stocks, I am watching the identified support zones, Microsoft’s higher ascending resistance, and Eli Lilly near $1,350. In commodities, silver’s approach to $50 and the $45 to $46 range remains important, while natural gas is moving toward its next support reference. For Bitcoin, the immediate questions are whether $79,400 holds and whether buyers can establish price back above $81,000.

Bottom Line

The earnings damage is severe, but the S&P has not yet lost its bullish structure. Rotation is helping the index hold together while individual stocks approach meaningful support. Those lower prices create opportunities, but the levels still matter more than the size of the decline. I am waiting for the right prices and watching whether S&P support holds.