Tech Stocks Rebound, but OpenAI Revenue Concerns Leave Recovery on Uncertain Ground

Stocks sold off Thursday as OpenAI’s reduction in its annual revenue figure raised concerns about spending on AI data centers. Technology shares recovered from their lows, but that rebound is competing with chart patterns that still leave room for further selling. SPY closed at $773.93, below its $775.21 recovery threshold. Falling 10-year yields could help, but Friday’s close will be important in determining whether that relief is taking shape.

In One Minute

The market recovered from a sharp technology selloff, but several important chart levels remain under pressure. OpenAI’s move from $70 billion to $50 billion in annual revenue triggered the selling, although differences in how third-party sales are counted softened the initial concern. SPY needs to reclaim $775.21, while a weekly 10-year yield close below 5.28% would strengthen the case for relief across more stocks. Bitcoin’s 1.9% decline has not yet broken its bullish consolidation, with $80,837 remaining the decisive support level.

The Context

The immediate concern is that weaker AI revenue could cause investors to reassess the spending planned for data centers and the businesses supplying them. The $20 billion difference is substantial, but the revenue comparison is complicated by accounting differences. Anthropic and cloud marketplaces such as AWS and Google Cloud include third-party sales in their revenue metrics, while OpenAI excludes those sales from this particular figure. That distinction helps explain why technology shares bounced after initially selling hard.

Rising yields have also been weighing on smaller and midsize companies that rely on financing and refinancing their debt. The largest companies have continued carrying the indexes higher, even while participation across the Nasdaq has been weak. At one point during new record highs, more than 70% of Nasdaq stocks were below their daily 50-period simple moving average. Lower yields could give those smaller companies room to recover and help the market advance with broader participation.

Key Developments

S&P 500 and SPY

The S&P 500 discussion centers on SPY, where the inverse head and shoulders recovery pattern is now in jeopardy. Price closed at $773.93, comfortably below the $775.21 neckline, the level that needs to hold for that recovery pattern to stay on track. Previous breaks have sometimes lasted only one candle before price moved back above the neckline the following day. A return above $775.21 would put the immediate outlook back on firmer bullish ground.

If selling continues, the next support is around $764, where an unfilled price gap lines up with previous pivot highs. Thursday began with a gap lower, followed by an attempt during the first hour to fill that gap and stay above the neckline. Price then slipped underneath it, tried to recover again, and fell sharply after the OpenAI news, reaching around $770 at 1:20 PM before finishing near $773. Trading after the close pushed higher toward the neckline, while the news-driven volatility created trading opportunities beyond the normally heavier morning activity.

Nasdaq and QQQ

The Nasdaq, shown as IXIC, recovered from its daily lows after selling accelerated around 12:10 PM and pushed the index to 27,069 points. On the 10-minute chart, price broke out of a small bearish consolidation and began showing some immediate bullish improvement. The larger picture remains a substantial decline followed by sideways trading, which still carries a bearish interpretation. The hourly QQQ chart also shows a bear flag, a pause after a decline that leaves another move lower possible.

The Nasdaq gap fill reference is around 28,867 points, close to a rising support trend line drawn from the March lows. That combination is an area to watch if selling continues into early next week. The recovery from Thursday’s lows is encouraging, but it has not removed the broader bearish consolidation.

SMH

SMH recovered strongly after briefly falling through former resistance that is now acting as support. Price pierced that area and then closed back near the line, so the move has not yet confirmed a breakdown. That support also aligns with the 0.618 Fibonacci retracement, while the next higher reference is the 0.786 retracement. Price is trying to consolidate between those levels, and falling yields could help the recovery despite the AI revenue concern.

10 Year Yield

The 10-year yield declined more sharply than it did the previous day, while recent daily candles developed long upper wicks. Those wicks show that yields moved higher but could not hold their gains, unlike an earlier candle whose large lower wick pointed toward upward pressure. The growing number of upper wicks now points toward a possible turn lower. The weekly test is 5.28%, with a Friday close clearly below that level needed to establish the weekly long upper wick more convincingly.

Gold and Silver

Gold rose 0.5% as yields declined, avoided making a new low, and continued moving sideways. Its broader structure remains a bearish consolidation, so another decline is still possible. Continued weakness in the 10-year yield could help, but gold has not yet moved out of that consolidation.

Silver fell 1.2% and again bounced after touching the 50% midpoint of its parallel channel. Its bear flag is beginning to break, with the daily candle likely to finish below the lower boundary of the recent pivot range. A rising trend line forms the neckline of a head and shoulders pattern with a measured downside target of $53.26. A daily close below the channel midpoint would help confirm further selling toward that target, with the broader buying zone between $53 and $50.

US Oil

US oil found support near $86.90 a couple of days ago and has continued moving sideways. Threats of further bombing in the Middle East initially made a breakout higher look possible, before President Trump said attacks were not planned before the midterms. Statements from US or Iranian leadership can change, so physical action matters more than announcements alone. The chart remains in a bear flag following the September 21 decline, without a sustained breakout higher.

I do not expect oil to rocket higher before the first week of November, although a move could come at the end of October if political conditions change. One scenario involves polls continuing to show around a 90% chance of Democrats winning the House of Representatives. I would also anticipate an effort to bring oil prices lower before voting rather than an escalation that sends them sharply higher. Those remain expectations, while the chart itself continues showing sideways trading after a decline.

Natural Gas and BOIL

Natural gas fell 2.58% after inventory data pressured prices, but it remains in breakout territory. A further pullback could offer an opportunity to begin buying gradually, although its strong prior advance leaves room for sharp moves through support. Previous support tests have worked, but those levels can break quickly and send price toward the next support. That volatility is why natural gas carries the “Widowmaker” nickname and why the approach remains to go light.

BOIL was fully exited at Wednesday’s highs, and the plan is to wait for another opportunity to enter as natural gas pulls back. The larger expectation remains for natural gas to move higher. On the weekly chart, the key obstacle is the lower boundary of a parallel channel that contained price beginning in February 2024. Since breaking below it in February of this year, price has repeatedly struggled to regain that boundary, which comes in at $3.59 in October.

BE

BE supplies energy for AI data centers, including through natural gas and alternative energy sources, which left it exposed to Thursday’s revenue concerns. It has been forming an extended bull flag since September. On the 10-minute chart, price was already declining before the OpenAI news triggered another sharp drop. It then formed a long lower wick and recovered strongly.

The next potential bounce area is $246.96, where a rising trend line meets the 0.382 Fibonacci retracement. If price reaches that intersection by October 14, it could offer a short-term rebound opportunity. The initial recovery objective would be a retest of at least $268.

NBIS

NBIS has broken below a rising support line drawn from the late July pivot low through subsequent pivots. Its broader chart shows repeated moves above and back inside a narrow parallel channel, and the latest weakness creates another test of that structure. The next support is $214 at the top of the channel. If selling continues through that level, the low pivot just below $205 could offer a potential day trade Friday.

For the bulls, holding above the channel is preferable to returning inside it and having to fight back above its boundary again. A successful support test could lead to a rebound toward $256.57, where another chart intersection creates resistance. The stock has recovered its channel before, but another return inside it would make the recovery take more time.

Chipotle

Chipotle, or CMG, rose 6.21% on news that Starbucks may pursue a buyout, with Chipotle bringing bankers into the process to prepare the paperwork. That is a strong move, but price has not yet regained the parallel channel that began in June 2024. Since breaking below it, repeated recovery attempts have met resistance, including several that briefly pierced the boundary before failing. Around $33.50 is the immediate test, with a close above it improving the near-term outlook.

The next overhead obstacle is a rising trend line connecting the June 4 pivot with the major August 11 pivot. Chipotle previously broke that line below, leaving it as another barrier during a recovery. If the stock moves up too quickly, profit-taking could keep price from clearing that resistance and becoming too extended.

Rollins

Rollins, Inc., or ROL, rose 4.5% as its weekly chart began showing a possible bottom after four trading days. The support zone combines a horizontal level at $29.32, drawn from the major pivot during the week of April 22, 2019, with the 0.786 Fibonacci retracement at $30.25. That retracement runs from the 2020 2020 lows to the most recent highs. Together, those levels form a support area around $30 that price briefly pierced this week before rebounding sharply.

The horizontal level previously acted as resistance, then became support after a breakout. The substantial recent selloff into two overlapping support references strengthens the case for a bounce toward $35.83. Further resistance sits at $37.98, the weaker barrier, followed by the stronger $43.36 level. Earlier low pivots and substantial trading activity around $45 add another obstacle if the recovery continues.

Digital Assets and Crypto

Bitcoin

Bitcoin fell 1.9%, but the current candle remains within the range of the earlier large green candle. Price tested that candle’s lower area and was likely to close back inside it, keeping the inside bar bullish structure intact. The bull flag remains active unless Bitcoin closes below $80,837, the low of that green candle. A close underneath would invalidate the setup and increase concern that a larger decline is starting.

Bitcoin also pierced a trend line and found support there after that same line had repeatedly rejected price from below. The eventual breakout turned former resistance into support, allowing price to consolidate on a higher level. As long as that support holds and Bitcoin avoids a close below $80,837, it still has a chance to reach $89,500. That is the neckline of the larger head and shoulders pattern, whose right shoulder found support at the bottom of the parallel channel.

Why It Matters

The technology rebound matters because the initial revenue shock did not produce a decisive breakdown across every chart. SPY remains below its neckline, but SMH recovered its support area, and several individual stocks have identifiable levels where buyers could respond. Falling yields could help those recoveries and give smaller companies relief from financing pressure. The key is whether the closing prices confirm that support is holding.

The commodity and Bitcoin charts show why a daily decline does not mean the same thing for every asset. Gold remains in bearish consolidation, silver is beginning to break its bear flag, and natural gas remains in breakout territory despite its pullback. Bitcoin is still inside its earlier green candle, leaving its bullish consolidation intact for now. The pattern and the closing level matter more than the direction of a single session.

Key Details

Bull Case

SPY can restore its immediate bullish outlook by reclaiming $775.21, while SMH’s recovery leaves its support intact for now. A weekly 10-year yield close clearly below 5.28% would support the expected decline in yields and could help more stocks recover. Gold could benefit if that yield decline continues, while natural gas still has a higher price outlook with $3.59 as its larger channel test. Bitcoin retains a path toward $89,500 while its trend line support and $80,837 candle low hold.

BE has a potential bounce setup at $246.96 toward at least $268, and NBIS could recover toward $256.57 if $214 holds. Chipotle would improve its position with a close above around $33.50. Rollins has already rebounded from its $30 support zone, with $35.83 as the first recovery reference before the higher resistance levels.

Bear Case

SPY’s close below its neckline leaves the recovery pattern at risk, with around $764 as the next downside support. The Nasdaq’s broader consolidation and QQQ’s hourly bear flag still allow further selling despite the rebound from Thursday’s lows. Gold remains vulnerable within its bearish consolidation, while silver’s developing breakdown points toward $53.26 and the $53 to $50 buying zone. Oil also remains in a bear flag, and natural gas can quickly fall through support despite retaining its breakout position.

NBIS risks returning inside its parallel channel if $214 fails, with the low pivot just below $205 becoming relevant. Chipotle still faces repeated channel resistance, and Rollins has several overhead barriers that could limit its rebound. Bitcoin’s bullish consolidation would fail on a close below $80,837, making that daily closing level the clear dividing line.

What to Watch Next

Friday’s 10-year yield close is the main weekly confirmation, with 5.28% the level to watch. SPY needs to regain $775.21, Chipotle needs a close above around $33.50, and NBIS could reach its potential day trade area just below $205 if selling continues. Into early next week, watch the Nasdaq’s gap fill and rising support combination, along with BE’s possible approach to $246.96 by October 14. For silver and Bitcoin, the decisive signals remain daily closes below the 50% channel midpoint and $80,837, respectively.

Bottom Line

The AI revenue concern triggered real selling, but the rebound and declining yields leave room for support to hold. SPY’s $775.21 neckline and the 10-year yield’s 5.28% weekly threshold are central to whether that recovery gains traction. Bitcoin remains in its bullish consolidation unless it closes below $80,837. Stay patient and let the closing levels confirm the next move.