Chip-Led Selloff Pressures E-mini S&P and NQ: Can Key Supports Hold?

E-mini S&P (December) / E-mini NQ (December)

S&P, yesterday’s close: Settled at 5862.75, down 45.50

NQ, yesterday’s close: Settled at 20,342.00, down 277.25

Monday’s exuberance quickly dissipated, and a chip-led selloff erased the E-mini S&P’s gains on the week and pinned the E-mini NQ back in range. ASML cut its net sales guidance for 2025, and the stock plunged 16.26% after reporting a day earlier than scheduled, by accident. The reality is, in such a scenario, the company should have lowered expectations weeks ago and the mishandling likely weighed further on the stock. The Dutch company faces an uphill battle given restrictions on China shipments imposed by the U.S. and Netherlands. Additionally, we see this as a harbinger of a disappointing PC cycle, something related to companies like Intel, rather than those more closely associated with NVDA and the evolving AI story. ASML is down another 4% ahead of the opening bell.

Price action rolled over sharply in the first hour of trade, but the selling began to subside as the session unfolded. In other words, it was not a relentless follow-through day. However, that is what matters here today. Will supports hold? While we did have major three-star support in E-mini S&P futures near settlement and adjusted to align with such, we have a critical area below there at 5843.25-5848.75. A ping, hold, and rally off this support would demonstrate a classic 'stop' sweep. The bulls must step up to defend this weakness or the E-mini S&P could also fall back into range, which sets up a longer consolidation process before rebounding to recent highs. Accordingly, we have reduced our Bullish Bias. Similarly, we have major three-star support in the E-mini NQ at....

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