Nasdaq Drops 5% as China's Low-Cost AI Disrupts U.S. Tech Sector

Nasdaq Futures Decline as China's AI Development Challenges Big Tech

Futures tied to the tech-heavy Nasdaq index fell significantly on Monday following the launch of a highly popular, low-cost Chinese artificial intelligence model, which triggered a selloff in AI-related stocks. Megacap companies, including Nvidia, experienced sharp declines as a result.

The downturn was driven by Chinese startup DeepSeek's introduction of a free AI assistant, which utilizes more affordable chips and less data. This development challenges the prevailing market expectation that AI demand will continue to boost a supply chain ranging from chip manufacturers to data centers.

USNAS100 Technical Analysis
The Nasdaq index has dropped by over 5.00%, primarily due to the release of a cost-efficient AI system in China. This development has disrupted market sentiment and negatively impacted U.S.-based AI companies, reinforcing bearish trends within the sector.

The market for indices is expected to remain highly volatile, but technical indicators suggest that the price is likely to oscillate between 20,660 and 20,990 until a breakout occurs. Currently, the price is attempting to reverse at 20,990. If the upcoming 4-hour candle closes below this level, it will likely decline to 20,660. Conversely, a 1-hour or 4-hour candle closing above 21,215 could signal a bullish trend, potentially driving the price upward toward 21,380 and 21,630, particularly if earnings reports reflect strong revenue performance.

Key Levels
Pivot Point: 20880
Resistance Levels: 20990, 21215, 21380
Support Levels: 20660, 20550, 20330

Trend Outlook
Consolidation Zone: 20990 to 20660
Bearish: Below 20660 and 20550
Bullish: Above 21215

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