US tech stocks have continued a brutal descent with a move below the 20,000 level.
NAS 100 – Daily Chart
The NAS 100 has breached the opening levels of the post-Trump election win rally. The next target on the downside is 18,330, with the 20,000 level now being key to the upside.
The Nasdaq 100 collection of the top US tech stocks is down around 15% since February. However, the price has stalled since the arrival of China’s DeepSeek AI tool.
The rally in AI stocks was already losing ground ahead of the rival model as catalysts had dried up. The so-called Gig Tech firms had been spending hugely on data centers in the US and this spending may start to unwind after DeepSeek showed that models can be built without big capital expenditure.
The most popular stocks in a rally can be the worst performers in a downtrend and that has been the case with Tesla down -50%, Palantir down -40% and, Nvidia down -30% from their respective all-time highs.
The path ahead now looks troubled after the Trump administration’s tariffs. Tesla has been under fire because its founder aligned himself with the White House. Protests against the company and even vandalism against vehicles have added to a sharp sales downturn in Europe and China. With Chinese EV makers gaining ground, Tesla is finally shaking off its huge overvaluation against the sector.
The President has tried to support the carmaker by saying he will buy a Tesla and drove one of the company’s vehicles onto the White House lawn on Tuesday. His support may be negative according to Wedbush analyst Dan Ives.
“Tesla is becoming a political symbol of Trump and DOGE, and that is a bad thing for the brand,” he said.
Ives also believes that Palantir’s losses will be temporary as companies increase AI spending in the coming years. In the meantime, the bears are in control of the Nasdaq 100.
