Goldman Sachs: Nasdaq is testing a key benchmark trendline, SOX decline comparable to the dot-com bubble burst and the 2008 financial crisis.

November 9 — Peter Callahan, Goldman Sachs' chief specialist for the technology, media and telecom sector, explicitly noted in his latest weekly report that the Nasdaq 100 index is retesting a key benchmark trendline connecting the April 2025 low and the March 2026 low. Last Thursday's close of about 26,630 points landed almost precisely on that line, and on Friday, driven by a rebound in semiconductor stocks, the index closed at 26,990 points, only about 1% above the trendline and still more than 14% below the October 6 historical high of 31,361 points. Callahan wrote that the significance of this level is hard to overstate.

If the trendline breaks, Callahan's chart shows the next obvious support level near the March 2026 low of about 23,000 points, a further decline of about 15% from current levels. Meanwhile, extreme market sentiment indicators have flashed red across the board — last Thursday saw the largest single-day put option volume in Cboe history, and the realized volatility of Goldman Sachs' flagship semiconductor stock basket surged to 93, the highest level since April this year.

The Nasdaq 100 fell about 5% last week, marking its fourth consecutive weekly decline. The Philadelphia Semiconductor Index (SOX) has fallen 28% over the past 22 trading days, and Callahan noted that the speed of this decline has been matched only a few times since 1997, including the dot-com bubble burst, the 2008 global financial crisis and the COVID-19 shock.

Callahan was blunt in describing current sentiment: "It is hard to overstate how difficult the market is" — although bottom-up data points such as memory pricing, compute pricing, supply-demand visibility and third-quarter earnings remain strong, the AI and semiconductor sectors have entered a "rolling bear market" since this summer, down about 40% cumulatively from their highs, while macro uncertainty surrounding policy and the direction of Congress is "difficult to model."