Nasdaq 100 Forecast: US Tech Stocks Extend Decline as AI Concerns Intensify
By Fawad Razaqzada | Date: Thu, 15 Oct 2026
Market Overview
Following a drop related to the Consumer Price Index (CPI), Nasdaq 100 futures have continued to decline, influenced by a weak performance from Asian markets. The US stock market faced significant pressure after an unexpectedly high inflation report, which reignited speculation about further interest rate hikes by the Federal Reserve. This situation led to an increase in Treasury yields and the dollar, although both subsequently retreated to pre-CPI levels. Despite this, the Nasdaq has not rebounded, primarily due to ongoing concerns regarding the AI sector.
Technical Analysis
The Nasdaq 100 has broken a bullish trend line that had been in place since March. The index has shown bearish price action after failing to maintain levels above the record high from June. A daily close below the trend line is necessary to confirm this bearish reversal, with key support levels identified between 29,000 and 29,240. Resistance is noted between 30,000 and 30,370, with the June high of 30,755 as a potential target if the index recovers.
AI Sector Pressures
The recent sell-off in technology stocks appears to be driven by more than just rising bond yields. Investors are increasingly skeptical about whether the substantial capital investments in AI can yield returns that justify current valuations amidst rising financing costs. This concern is reflected in credit markets, where the cost of insuring against defaults among US tech companies has reached record highs, particularly affecting capital-intensive businesses reliant on future revenue growth.
Market Sentiment Shift
Interestingly, positive news from the semiconductor industry, such as TSMC's strong revenue forecast, failed to uplift the broader tech sector, indicating a shift in market sentiment. The focus has transitioned from the potential growth of AI to the profitability of the investments being made in this sector. This skepticism has been particularly evident in Asia, where tech-heavy indices like the KOSPI experienced sharp declines.
Bonds and Interest Rates
In contrast to the struggles of tech stocks, Treasuries have seen a rally as investors seek safe-haven assets, leading to lower yields. However, this decline in yields has not provided relief for technology stocks, suggesting that the issues at play are more complex, involving concerns about valuation and the economics of the AI investment cycle.
Future Outlook
Following the CPI data, the market has adjusted its expectations for Federal Reserve rate hikes, with a significant increase in the probability of hikes in October and December. The upcoming Producer Price Index (PPI) report is anticipated to further influence market sentiment, with expectations of a monthly increase of 0.3% on the core front and 0.6% on the headline front. A hotter-than-expected PPI could exacerbate the bearish outlook for the Nasdaq 100.