Fed, Chip Stocks, and China: The Three Things Moving Markets on Tuesday

TLDR

• Nasdaq 100 futures fell 0.7–0.8%, S&P 500 futures slipped 0.1%, while Dow futures edged up ~0.3%
• South Korea’s Kospi dropped over 10%, with SK Hynix and Samsung falling 14% and 13%
• Reports of Nvidia exploring a $250 billion funding backstop for OpenAI raised circular financing fears
• Chinese competition in chip manufacturing is adding pressure to US semiconductor stocks
• The Federal Reserve begins its two-day policy meeting Tuesday, with a rate decision due Wednesday

Nasdaq futures dropped sharply Tuesday morning as a sell-off in chip stocks deepened, driven by concerns over AI spending and growing competition from China.

Nasdaq 100 futures fell around 0.8%, pointing to further losses for tech when markets open. S&P 500 futures were down 0.1%, while Dow Jones futures bucked the trend, rising about 0.3%.

The pressure started in Asia. South Korea’s Kospi index plunged more than 10% on Tuesday, one of its sharpest single-day drops in years.

Memory chipmakers SK Hynix and Samsung Electronics were at the center of the sell-off. SK Hynix shares fell more than 14%, and Samsung dropped over 13%.

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