Chips Have Their Worst Day Since June, and SPX Opens on Thursday's Low

Chips had their worst day since June. The semiconductor index fell 6.7% Thursday after Lam Research warned its supply limits run into 2027 and Jensen Huang told CNBC the neoclouds buying Nvidia's chips are short of money: "The demand for capital is much greater than the supply of the capital." The Nasdaq lost 2.6% while the Dow finished flat. SPX closed at 7,663.43, down 1.21%, its worst day since July. Premarket 7,637.

Yields went the other way from oil. The 10-year closed near 4.95%, its biggest one-day drop in more than a year, on a day Brent settled at $113, and it's the third week running that bonds rallied when the chips fell. Huang says neocloud demand is exploding and only the money is short, which is a growth problem before it's an inflation one. Chips are flat this morning and the selling has moved to the phone companies. AT&T and Verizon are both down more than 4% on a Bloomberg report that SpaceX is in talks to lease 80,000 cell towers, while the companies that own the towers are up about 10% or more, and Brent is up again near $115 after Trump accused Iran of driving oil higher before the midterms. Deckers is down about 8% after missing on revenue. Flash PMIs land at 9:45, final Michigan sentiment at 10:00.

The profile is close to six to one negative, and premarket sits 48 under the 7,685 flip, right on Thursday's low. Every strike from the flip down is negative, so dealers add to moves both ways, and the heaviest of them overhead is 7,650, just under the 7,663 close where four rallies stopped Thursday afternoon. That makes 7,650-7,663 the first resistance on any bounce. The 7,600 put wall has the 100-day and prior demand 7,598 on it, but the negatives keep coming underneath, so it reacts hard and travels if it goes. The 7,720 call wall is small and far away, with only thin positive gamma from 7,705 up.

Bounces into 7,663 are for fading, where Thursday's afternoon highs sit over the 7,650 node, for 7,650 and prior demand 7,631. A hold over 7,682, prior demand 7,681 and the flip, ends the short. The long trade is lower, at the 7,600 put wall with the 100-day on it, and nowhere near the open.