Chip selloff hits Asia as bank earnings season opens
Chip stocks sold off sharply overnight (Kospi -7.4%, Nikkei -2.5%) and US futures were mixed as JPMorgan, Goldman Sachs, Citigroup and Wells Fargo open bank earnings season.
Wall Street enters Tuesday’s session digesting a sharp overnight selloff in Asian chip stocks and bracing for the first wave of big-bank earnings. S&P 500 futures were roughly flat (down less than 0.1%) as of mid-morning premarket trading, Dow futures were higher (up roughly 0.6%-0.8%), and Nasdaq 100 futures were the laggard, down about 0.7%, as a renewed selloff in memory and semiconductor names extended into a second day, according to Bloomberg and Yahoo Finance. That follows a mixed close on Monday, when the Dow Jones Industrial Average gained 195.60 points (+0.38%) to 51,850.55 while the S&P 500 slipped 0.06% to 7,807.24 and the Nasdaq Composite fell 0.44% to 27,245.90; banks and the bond market were shut for the Columbus Day holiday, per Fool.com’s market wrap.
The overnight action centered on South Korea, where the Kospi plunged 7.4% to 5,914.35, its lowest level since late July, as Samsung Electronics fell 7.7% and SK Hynix dropped 8.8%, according to NBC News. Japan’s Nikkei 225 also fell, down 2.5% to 67,292.39, dragged lower by Tokyo Electron and SoftBank. Reports pointed to chip-valuation worries and concern that China’s memory maker CXMT is closing the gap on Samsung, SK Hynix and Micron Technology, compounded by oil-driven inflation fears; the yen firmed and U.S. Treasury yields eased in the wake of the rout. That selloff carried into U.S. premarket trading, with chip names including Micron (MU), SanDisk (SNDK) and NVIDIA (NVDA) cited among early movers, per Yahoo Finance.
The main event for U.S. investors today is the formal start of third-quarter bank earnings season: JPMorgan Chase, Goldman Sachs, Citigroup and Wells Fargo are all due to report before the open, per Pomegra and Rallies.ai earnings previews. Separately, a federal funding standoff that had threatened an October shutdown was resolved in early September when a continuing resolution was signed, keeping agencies funded into December, according to Breaking Defense and other coverage — removing that as a near-term overhang. Wednesday brings the next macro catalyst, the September CPI report, due at 8:30 a.m. ET, with the next Federal Reserve rate decision not until October 28.
What to watch today
- JPMorgan Chase & Co. (JPM) reports before the open; analyst consensus calls for roughly $5.90 in EPS on about $51.26 billion of revenue, with focus on net interest income, capital-markets fees and loan-loss provisions. (Admiral Markets / Benzinga)
- UnitedHealth Group (UNH) reports before the open; consensus is around $4.15 in EPS on about $111.49 billion of revenue, with the options market pricing in roughly a 7% share-price move on the news. (247wallst / TipRanks)
- Goldman Sachs (GS), Citigroup (C) and Wells Fargo (WFC) also report before Tuesday’s open, rounding out the first day of big-bank Q3 earnings; Bank of America and Morgan Stanley follow Wednesday. (Pomegra / Rallies.ai)
- Chipmakers remain in focus in U.S. premarket trading after South Korea’s Kospi sank 7.4% overnight on fears China’s CXMT is narrowing the gap with Samsung, SK Hynix and Micron; Micron (MU), SanDisk (SNDK) and NVIDIA (NVDA) were cited among early movers. (NBC News / Yahoo Finance)
- The September CPI report is scheduled for release Wednesday at 8:30 a.m. ET, ahead of the Federal Reserve’s next rate decision on October 28. (financecalendar.com)
Watchlist earnings today: JPMorgan Chase & Co. (JPM, before the open) · UnitedHealth Group Incorporated (UNH, before the open)