Chips slide on a Broadcom 'casino' line; Kospi -5.46%; banks report

Broadcom’s chief executive likened AI investing to a casino on Monday, a Chinese memory maker said it has a denser server chip coming, and the semiconductors fell for a third session: Micron lost 3.88%, Intel 3.20%, Arm 4.15% and Nvidia 1.29%, and overnight South Korea’s Kospi closed down 5.46% with SK hynix off 10.09%. The money rotated rather than left: the Dow rose 0.38% to a close of 51,850.55 while the Nasdaq fell 0.44%, and 54 of the 100 stocks and funds we track rose. Energy, staples and the three carriers that lost a tenth of their value on Friday led the gainers. Third-quarter earnings season opens before the bell with JPMorgan, Wells Fargo, Goldman Sachs, Citigroup, UnitedHealth and Johnson & Johnson, and the bond market reopens after Columbus Day.

Chips fell on a casino remark and a Chinese memory chip

Two stories landed on the same day. At an event in Singapore, Broadcom chief executive Hock Tan said many AI investors do not understand what they are buying and compared their behaviour to gambling in a casino, questioned whether OpenAI can be profitable in the long run despite annualised revenue of around $50 billion, and said access to capital may become a bigger constraint on AI expansion than chips or electricity, per investingLive and The Guardian. He said it while still targeting $230 billion in AI chip sales, so the remark was not a warning about his own order book; it was a warning about who is paying for everyone else’s. Separately, China’s ChangXin Memory Technologies, or CXMT, was reported to be planning server DDR5 chips with a more compact cell design by the end of the year, per the Korea Herald, which is a direct challenge to the two Korean memory makers and to Micron.

Micron (MU) fell 3.88% to $989.04 from $1,029.00 on 23.7 million shares, the largest drag on the Nasdaq, per Yahoo Finance, and was quoted at $975.20 after hours. Intel (INTC) fell 3.20% to $101.35 from $104.70 on 73.7 million shares and was at $100.17 after hours. Arm (ARM) fell 4.15% to $255.24 from $266.28, its third straight decline after losses of 6.48% Thursday and 3.27% Friday. AMD (AMD) fell 2.28% to $594.24 from $608.10, Applied Materials (AMAT) 1.87% to $497.53, Broadcom (AVGO) 1.88% to $354.73 from $361.54, and Nvidia (NVDA) 1.29% to $226.32 from $229.28 on 70.1 million shares, with an after-hours quote of $224.45. The Philadelphia Semiconductor Index fell 2.67%, per the Korea Herald. The technology fund XLK fell 1.22% and the Nasdaq-100 fund QQQ 0.70% to $746.04.

The connection worth seeing is that Monday’s selling was not about demand. Nobody disputed that AI chips are selling; Tan’s own figure says they are. The two questions the market was pricing were whether the buyers can keep financing the purchases, which is Tan’s point, and whether the memory part of the bill is about to get cheaper because a Chinese supplier can make it, which is CXMT’s. Those hit Micron and the Korean memory names hardest, and the names furthest from memory, Nvidia and Broadcom, least.

Korea fell 5.46% and Europe’s chipmakers followed

South Korea’s Kospi closed at 6,035.35, down 5.46%, after briefly falling below 6,000 to its lowest level since July 31, per the Korea Herald. Samsung Electronics fell 7.39% and SK hynix 10.09%. Foreign investors sold a net 2.2 trillion won on the day and nearly 8 trillion won so far this month, and the drop triggered a sell-side sidecar, which temporarily suspends program-trading sell orders, for the first time in nearly two months, per Marketscreener. Analysts quoted by the Korea Herald said the foreign outflows are too large to be portfolio rebalancing after this year’s rally, and listed higher rates, oil and geopolitics alongside the chip news; that is the same contested explanation as Friday’s 3.65% fall, now with a larger number attached. Elsewhere in Asia, Japan’s Nikkei was down 2.6%, China’s ChiNext 3%, the CSI 300 1.3% and the Shanghai Composite 1.2% in investingLive’s 01:58 a.m. ET report; Japanese trading resumed after Monday’s Sports Day holiday, so the Nikkei was catching up on two days of chip news at once.

Europe is mixed in the same way the US was. The Stoxx 600 opened up 0.4%, with banks, chemicals and utilities leading and the FTSE 100 ahead of the other bourses, while ASML fell 3.3% and STMicroelectronics and Infineon about 5% each, per CNBC. Luxury fell after LVMH reported weaker-than-expected results after Monday’s European close. ASML reports its own third quarter on Wednesday. S&P 500 futures were down about 0.2% and Nasdaq-100 futures about 0.7% in CNBC’s early snapshot, with Dow futures slightly higher; all three have moved since.

Software gave Friday’s gains back; Meta and Shopify did not

The names that led Friday’s software rally were sold on Monday, and the cybersecurity group most of all. CrowdStrike (CRWD) fell 4.37% to $263.01 from $275.04 on 7.2 million shares, which TradingKey attributed to profit-taking after a multi-week run, erasing Friday’s 4.57% gain. Palo Alto Networks (PANW) fell 3.57% to $403.83 from $418.78, Cloudflare (NET) 2.79% to $350.87, Oracle (ORCL) 2.84% to $137.39 from $141.40 on 21.5 million shares, Cisco (CSCO) 2.58% to $115.34, Snowflake (SNOW) 2.31% to $360.37, Datadog (DDOG) 2.04% to $287.29, Affirm (AFRM) 2.57% and MongoDB (MDB) 1.20%. Amazon (AMZN) fell 1.11% to $259.53 and Tesla (TSLA) 1.22% to $378.03. We found no company-specific news for any of them; the simplest reading is that the OpenAI-revenue optimism that lifted the group on Friday was repriced by Tan’s remarks about who funds that spending.

Two large names went the other way. Meta (META) rose 3.38% to $742.96 from $718.67 on 24.8 million shares after launching Muse Wonder, the model it says is the most advanced option for its digital assistants, behind a $20 or $100 monthly subscription to the Muse agent app, per CNBC; 24/7 Wall St. pointed to third-party retention data for the Muse agent that beat the category leader on day one but also showed users drifting away within days. Meta was quoted at $741.50 after hours. Shopify (SHOP) rose 4.90% to $179.22 from $170.85 on 12.4 million shares after analyst notes from Cantor Fitzgerald and Piper Sandler pointed to AI demand, per Benzinga; some reports tied the move to a Muse integration in Shop Pay, which we could not confirm. Salesforce (CRM) rose 2.09% to $233.92 from $229.13, the one large enterprise-software name higher, with no confirmed catalyst. Microsoft (MSFT) rose 1.14% to $541.15 from $535.07, Apple (AAPL) 1.29% to $340.97 from $336.64, recovering Friday’s 1.11% dip, and Alphabet (GOOGL) 0.30%.

In the movers feed, Fair Isaac (FICO) rose 10.74% to $739.74 on 2.0 million shares, which TipRanks described as a bounce from oversold levels after the multi-week selloff that followed new mortgage credit-scoring rules, helped by clearer implementation details from regulators; the stock lost about 21.7% in a single session around October 1, per Timothy Sykes, so the rebound recovers only part of that.

Energy, staples and the carriers took the Dow higher

The S&P 500 closed at 7,807.24, down 0.06%, the Dow at 51,850.55, up 195.60 points or 0.38%, and the Nasdaq Composite at 27,245.90, down 0.44%, per the Motley Fool and Yahoo Finance; CNBC described the S&P 500 as pressured by higher oil and memory-chip losses and the Dow as a rotation into value. In our feed the S&P 500 fund SPY fell 0.06% to $778.10, the Dow fund DIA rose 0.35% to $517.91, and the small-cap fund IWM fell 0.37%. Breadth was positive: 54 of the 100 stocks and funds we track rose. Of the rest, 45 fell and Morgan Stanley closed unchanged.

Energy led. Exxon (XOM) rose 1.90% to $172.15 from $168.94, Chevron (CVX) 1.42% to $215.00, and the energy fund XLE 1.43%. Oil rose after Russian strikes on Ukrainian energy infrastructure a day after President Trump announced an energy ceasefire between Moscow and Kyiv, per CNBC; the ceasefire has still not been confirmed by either government. Brent was quoted near $106 a barrel late Monday, up about 2% on the day, per a live tracker, and this morning investingLive has it near a two-week high after attacks on Saudi oil facilities, with Hormuz tanker traffic at a two-month low. Reports on Monday’s exact level disagree by about $2 depending on contract month and timestamp, so treat the $106 as approximate; the point is that Brent is above $100 for a reason the ceasefire headline has not changed.

The defensives rose with it. Coca-Cola (KO) rose 1.98% to $89.79 from $88.05, Procter & Gamble (PG) 1.30% to $153.20, Walmart (WMT) 1.55% to $113.08, Costco (COST) 1.32%, AbbVie (ABBV) 1.68% to $281.12, Abbott (ABT) 2.23% to $101.82, Johnson & Johnson (JNJ) 0.88% to $263.73 into its report, and the healthcare fund XLV 0.69%. The carriers bounced after Friday’s SpaceX-driven rout: Verizon (VZ) rose 2.71% to $42.78 from $41.65 on 29.0 million shares, T-Mobile (TMUS) 2.21% to $151.87 from $148.58, and AT&T (T) 1.40% to $22.49 from $22.18 on 51.3 million shares, recovering about a fifth of Friday’s losses between them. Prologis (PLD) rose 2.30%, Nike (NKE) 1.84% and Starbucks (SBUX) 1.70%. The gold fund GLD fell 0.63% to $382.15 and the long-dated Treasury fund TLT rose 0.09% on a day when the Treasury market itself was closed, so Monday’s TLT print reflects only the fund’s own trading.

Banks report this morning, with UnitedHealth and Johnson & Johnson

The banks went into their reports mixed, with the financial fund XLF up 0.58%. Citigroup (C) rose 1.76% to $131.92 from $129.64, JPMorgan (JPM) 0.39% to $334.30, Bank of America (BAC) 0.48%, American Express (AXP) 1.09%, Visa (V) 0.99% and Mastercard (MA) 1.01%; Goldman Sachs (GS) fell 0.15% to $893.95, Wells Fargo (WFC) 0.28% to $83.32, and Morgan Stanley (MS) closed unchanged at $190.02, its previous close. JPMorgan and Wells Fargo report around 7:00 a.m. ET, Goldman around 7:30 and Citigroup around 8:00, per Admiral Markets and Finimize, with JPMorgan’s call at 8:30 a.m. Consensus for JPMorgan runs from about $5.82 to $5.93 a share depending on the provider, on revenue of roughly $50.6 billion to $51.2 billion, which is wide enough that the first headline is worth reading against the provider named in it. FactSet, via CNBC, has the banks growing earnings about 10% for the quarter. Bank of America, Morgan Stanley and BlackRock report Wednesday; several previews group BlackRock with today, and the day-by-day calendars do not.

UnitedHealth (UNH) fell 0.21% to $378.52 ahead of its report, with consensus near $4.12 to $4.15 a share on about $111.3 billion to $111.4 billion of revenue, per Investing.com and Kiplinger. It gained 2.25% on Friday after Humana’s Medicare Advantage star ratings, so the number the market is waiting for is 2027 guidance as much as the quarter. Johnson & Johnson reports before the open too, with consensus of about $2.51 to $2.53 a share on roughly $25.3 billion to $25.4 billion of revenue, per Kiplinger and Benzinga. Domino’s Pizza and Albertsons also report this morning, per Earnings Whispers.

What to watch today

Bank earnings before the open: JPMorgan and Wells Fargo around 7:00 a.m. ET, Goldman Sachs around 7:30, Citigroup around 8:00; JPMorgan’s call is at 8:30 a.m., Wells Fargo’s at 10:00 and Citigroup’s at 11:00. UnitedHealth, Johnson & Johnson, Domino’s and Albertsons also report before the bell.
NFIB small-business optimism for September at 6:00 a.m. ET; prior 98.7, consensus 98, per Trading Economics.
Existing home sales for September at 10:00 a.m. ET; prior 3.98 million, consensus 3.96 million, per Trading Economics. The release appears on both the Trading Economics and the Fed’s FRED calendars for today.
The bond market reopens after Columbus Day, the first Treasury trading since Friday’s 10-year close of 5.24%. The Fed’s daily statistical releases delayed from Monday also come out today.
Fed speakers: Governor Waller spoke on AI at the Bloomberg New Economy Forum in New Delhi at 3:45 a.m. ET, per the Fed’s calendar; Kiplinger lists Richmond Fed President Barkin at 1:00 p.m. and Boston Fed President Collins at 4:00 p.m. ET, which we could not confirm on the Fed board’s own page, which lists only governors. The federal budget statement for September is due at 2:00 p.m. ET, and the IMF publishes its World Economic Outlook today.
The chips at the open, after the after-hours quotes: Micron at $975.20, Nvidia at $224.45, Intel at $100.17, Broadcom at $353.21.
Oil, with Brent near $106 and the Russia–Ukraine energy ceasefire still unconfirmed by either side.
Wednesday: September CPI at 8:30 a.m. ET, then Bank of America, Morgan Stanley and BlackRock before the US open and ASML in Europe.

Not financial advice. iTrading Buddy summarizes publicly available market data and news; every figure above is sourced from the reporting available before the US open on the date shown. Verify anything you act on.