U.S. stocks are showing significant divergence right now. Strong stocks remain strong, while weaker stocks continue to follow the Nasdaq.
AI and semiconductors are diverging. There are still opportunities, but you need to buy strong stocks!
In the short term, I still lean somewhat bearish. The Nasdaq rebounded about 1.1% yesterday, and semiconductor stocks also bounced, but most of those gains were wiped out this morning. This suggests yesterday’s rise was more like the first confirmation after an oversold rebound.
1. The 10-year Treasury yield is still around 5.1%. High interest rates are weighing on high-valuation growth stocks.
2. Crude oil has remained elevated, hovering around $100 and continuing to put pressure on the market.
Stocks to watch closely today
$AMZN
Amazon
It rose nearly 5% yesterday without any significant sell-off after opening higher. It is currently still holding around 262. Morgan Stanley just named Amazon a Top Pick and raised its price target to $350. The core rationale is long-term profit growth driven by AWS growth and AI infrastructure. You can buy on a pullback to 262–253; set a stop-loss if it falls below 250.
$INTC
Intel
INTC is currently around 90. After rising yesterday, it pulled back again in premarket trading today. Earnings are due after the market closes on October 22. AI demand and tight chip supplies could lead to improved earnings.
You can keep an eye on it around 90, but I don’t recommend making a big bet on earnings right now. If it gets back above 94–95, that would indicate money is flowing back into INTC. If it falls below 88, get out.
AI and semiconductors are diverging. There are still opportunities, but you need to buy strong stocks!
In the short term, I still lean somewhat bearish. The Nasdaq rebounded about 1.1% yesterday, and semiconductor stocks also bounced, but most of those gains were wiped out this morning. This suggests yesterday’s rise was more like the first confirmation after an oversold rebound.
1. The 10-year Treasury yield is still around 5.1%. High interest rates are weighing on high-valuation growth stocks.
2. Crude oil has remained elevated, hovering around $100 and continuing to put pressure on the market.
Stocks to watch closely today
$AMZN
Amazon
It rose nearly 5% yesterday without any significant sell-off after opening higher. It is currently still holding around 262. Morgan Stanley just named Amazon a Top Pick and raised its price target to $350. The core rationale is long-term profit growth driven by AWS growth and AI infrastructure. You can buy on a pullback to 262–253; set a stop-loss if it falls below 250.
$INTC
Intel
INTC is currently around 90. After rising yesterday, it pulled back again in premarket trading today. Earnings are due after the market closes on October 22. AI demand and tight chip supplies could lead to improved earnings.
You can keep an eye on it around 90, but I don’t recommend making a big bet on earnings right now. If it gets back above 94–95, that would indicate money is flowing back into INTC. If it falls below 88, get out.