QQQ at $605: Tech ETF Flatlines as AI Euphoria Fades and Wall Street Hunts for New Leaders

If you’re looking for fireworks, you won’t find them in the $QQQ tape tonight. The tech ETF is frozen at $605.65, a level that’s less a price and more a ceasefire. But don’t mistake the lack of movement for a lack of story. Under the surface, the Nasdaq’s worst two-day drop since April has left the AI trade in shambles, software stocks are being marked down like last season’s fashion, and Wall Street is scrambling to figure out what comes next. The real action isn’t in the price. It’s in the rotation.

The headlines tell the tale. Bloomberg and WSJ both flagged the tech rout, with “Nasdaq Sinks to Year Low as Software Stocks Weigh” and “Intensifying Tech Slide Sends Nasdaq to Worst Two-Day Drop Since April.” CNBC’s Jim Cramer is back to preaching diversification, which is always a sign that the easy money has left the building. Meanwhile, the $QQQ sits at $605.65, refusing to move, as if daring traders to pick a side.

This is a market that’s lost its narrative. The AI euphoria that powered tech to all-time highs in 2025 has hit a wall. Investors are questioning whether software stocks can survive the coming wave of AI disruption, or if they’re about to be eaten by their own creations. The rotation out of tech and into industrials, health care, and even transports is the clearest sign yet that the market is looking for new leadership. Old Dominion’s freight bottom and the surge in industrials are the kind of things you only notice when tech stops working.

Let’s get granular. The Nasdaq (^IXIC) is at 22,903.13, a year low. Software stocks are under pressure globally, with outflows accelerating as AI fears mount. The $QQQ is flat, but the underlying components are anything but. Mega-cap tech is holding up, but the second tier, those high-growth, no-profit names that were supposed to be the future, are getting obliterated. The options market is lighting up with put buying, and implied vols are creeping higher. This isn’t a crash, but it’s not a healthy market either.

The macro backdrop isn’t helping. The Fed is signaling that inflation is still the bigger risk, which means rate cuts are off the table for now. That’s bad news for growth stocks, which need cheap money to justify their valuations. The rotation into real economy stocks is a defensive move, not a sign of confidence. The fact that $QQQ is flat while everything else is moving is a sign that traders are paralyzed, waiting for the next shoe to drop.

Historically, these periods of rotation are messy. In 2018, when tech last lost its leadership, the market spent months churning before new winners emerged. The same thing happened in 2000, when the dot-com bubble burst and value stocks had their moment in the sun. The difference this time is the speed. The AI trade went from consensus to crowded to crisis in the span of six months. Now, the market is trying to figure out what, if anything, can fill the void.

The cross-asset picture is instructive. Gold is flat, which means the risk-off move isn’t a full-blown panic yet. Commodities are drifting, and crypto is stuck in a rut. The only real winners are the sectors that nobody cared about six months ago, industrials, transports, and select health care names. The rotation is real, but it’s not broad. That’s a sign that the market is still searching for conviction.

The real story here is that the $QQQ is stuck in limbo. The tape is saying “wait and see,” but the fundamentals are deteriorating. Earnings revisions are coming down, growth estimates are being slashed, and the AI narrative is being rewritten in real time. The options market is betting on more downside, but the lack of movement in the ETF itself suggests that the big money is waiting for a catalyst. This is a market that’s coiled, not broken.

Strykr Watch

Technically, $QQQ at $605.65 is sitting right on its 50-day moving average, with the 200-day down at $590. The RSI is neutral at 48, which means there’s no momentum in either direction. Support is at $600, a level that’s been tested but not breached. Resistance is at $620, which lines up with the January highs. A break above $620 would signal that the rotation is over and tech is back in charge. A break below $600 would open the door to a quick move down to $585.

The options market is pricing in a volatility uptick, with implied vols at 21%, up from a 3-month average of 17%. Put/call ratios are elevated, suggesting that traders are hedging against more downside. Open interest in the $600 puts has spiked, while call volume at $620 is picking up. This is a market that’s nervous, but not panicked.

Flows into $QQQ have turned negative, with $800 million in outflows over the last week. That’s the biggest weekly outflow since last summer. The retail crowd is still buying the dip, but institutional money is heading for the exits. That’s a recipe for more volatility if the selling accelerates.

The risk here is that the rotation out of tech turns into a stampede. If $QQQ breaks below $600, the next stop is $585, and there’s not much support below that. The Fed could surprise with a dovish pivot, but that seems unlikely given the inflation rhetoric. The upside is capped unless the AI narrative finds new life or earnings come in better than expected.

The opportunity is to play the range. Long $QQQ on a dip to $600, with a stop at $595 and a target at $620. For the more aggressive, buying puts at $600 is a way to play for a breakdown. Selling calls at $620 can generate premium if you think the upside is capped.

Strykr Take

The tech trade is on life support, and $QQQ is the canary in the coal mine. The lack of movement is its own kind of warning. The rotation into real economy stocks is real, but it’s not enough to offset the damage in tech. The risk is to the downside, but the tape is telling you to be patient. This is a market that’s waiting for a catalyst, and when it comes, the move will be violent. Until then, play the range and keep your stops tight. The easy money is gone. Now it’s about survival.