Gold's appeal weakens, BlackRock ends its underweight on U.S. Treasuries for the first time in six years, and U.S. stocks set a record with 52 consecutive days without a single-day drop of more than 1%. Memory chips are hit by CXMT's 4F² technology breakthrough, the market focuses on the Korean semiconductor exhibition, and optical communications plunge, giving back gains. Meta rises more than 3% against the trend, Microsoft's market cap returns to $4 trillion, and Apple's launch event arrives with AI smart home.
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Gold's appeal weakens; BlackRock ends its underweight U.S. Treasury stance for the first time in nearly six years.
The S&P 500 edged down 0.06%, the Nasdaq fell 0.44%, and the Dow rose 0.38% against the trend. Total market volume was only 12.67 billion shares, significantly below the 20-day average; SPY volume was about 18 million shares, the lowest level on a non-holiday basis since 2003 (second only to Thanksgiving in 2024 and 2025). BTIG chief technical strategist Jonathan Krinsky noted that the calendar gap, combined with the Treasury market being closed for Columbus Day, led investors to stay on the sidelines and wait for this week's major bank earnings. The S&P has gone 52 consecutive trading sessions without a single-day drop of more than 1%; if Tuesday still does not break the record, it will mark the longest calm period since January 2020.
Cleveland Fed President Beth Hammack said policy is still not restrictive enough and that she favors small, rapid rate hikes to push inflation back down to 2%, and noted that AI data center construction has begun to spill over and drive up costs across a broader range of industries. The dollar index rose 0.37%, approaching its April 2025 cycle high, EUR/USD fell to 1.1154, and the yen fell to 158.64. Spot gold fell 0.6% to about $4,168. Kazakhstan's central bank, one of the world's largest gold buyers, announced plans to cut gold's share of reserves from about 78% to 75% by year-end, citing the significantly increased appeal of dollar assets after U.S. Treasury yields rose to multi-year highs. Bank of America believes gold may struggle to hold above $4,000 over the next three months because physical demand is weak and ETF buying alone is unlikely to sustain high prices; if gold weakens, it could also trigger investor liquidation.
BlackRock ended its underweight U.S. Treasury stance for the first time in nearly six years, raising short-term Treasuries to overweight and long-term Treasuries to neutral, while cutting U.S. equities from overweight to neutral, citing attractive yields and the possibility that the market's rate-hike expectations are excessive, but stressing that the reduction is only to manage short-term volatility in AI infrastructure and that it remains bullish on the AI thesis over the long term. Former Bridgewater chief strategist Rebecca Patterson warned that rising rates have not yet overwhelmed the growth and earnings narrative, but if continued central bank tightening pushes rates even higher, the risk will increase that rates dominate and suppress equity market sentiment. Morgan Stanley strategist Michael Wilson believes the bond market has already "hiked" for the Fed via a 120 basis point rise in yields, and that a U.S. equity rebound requires the MOVE index to fall and signals from bank earnings.
Goldman Sachs, Morgan Stanley, Citi, and others generally believe the 10-year U.S. Treasury yield at about 5.24% is already attractive, but Bank of America, Barclays, UBS, and others warn that yields may not have peaked, and oil prices and geopolitics could still push term premiums higher.
Houthi forces attacked Saudi Arabia's King Khalid International Airport, causing casualties, and attacks on oil tankers near the Strait of Hormuz and the Gulf of Oman have increased. Trump said Washington is considering joining strikes against the Houthis, while defending eased sanctions on Russian diesel exports as "America First" and helpful in lowering U.S. energy prices, and declared that a Russia-Ukraine "energy ceasefire takes effect immediately." Zelensky said he was unaware of the statement, and the Kremlin also did not confirm it. WTI rose more than 2% to about $93.23, and Brent rose 1.84%. Physical market roll premiums rebounded to extreme levels, indicating supply remains tight, and the energy ETF XLE and the global shipping ETF BOAT both hit record highs.
Storage and optical communications led declines, while Meta and Microsoft underpinned Mag7 resilience.
Last night, U.S. tech and semiconductors were the weakest sectors, with the Philadelphia Semiconductor Index falling 2.7% to a three-week low.
The trigger for the selloff came from ChangXin Memory's weekend announcement of a key breakthrough in its 4F² memory cell architecture, with plans to launch server memory products based on that architecture by the end of 2026. The 4F² architecture can fit more memory cells into a chip of the same area, increasing density and reducing power consumption, directly targeting the high-margin DRAM used in AI servers. If ChangXin delivers 4F² DDR5 RDIMM products on schedule by year-end, it will lead the two South Korean giants by about two years at the cell architecture level, and the market worries that future global DRAM supply will increase, potentially bringing the memory chip price-up cycle to a peak earlier than expected.
Musk commented that once China masters a technology, its scaling capacity often exceeds that of the rest of the world combined, but he also stressed that more cutting-edge technologies such as HBM, the SRAM layer below the logic layer, 3D stacked RAM, and thermal management remain significantly more difficult for China.
A catch-up decline in the South Korean market intensified selling pressure across the global memory sector. KOSPI plunged 3.65% on Monday and fell more than 7% in early trading on Tuesday, already breaking below its 200-day moving average. The deeper structural problems come from multiple sources:
First, the buyback backstop has disappeared: the combined buyback plans of Samsung and SK Hynix totaling about KRW 55 trillion (about $41 billion) ended several weeks early, with Samsung's buyback terminated on October 6 and SK Hynix's also nearing completion.
Second, capital outflows are accelerating: foreign investors have withdrawn a net $131 billion from Korean equities this year, the most among major Asian markets, and market turnover has shrunk 70% from its late-May peak.
Third, retail leverage is receding: retail confidence, which had been a driver of the first-half rally, has been shaken. Margin balances in the Korean stock market have fallen from a high of KRW 38.6 trillion in June to about KRW 33 trillion, and idle funds in brokerage accounts waiting to enter the market have also dropped from nearly KRW 140 trillion to about KRW 100 trillion.
Fourth, tightening expectations are rising: Korean bond market swap data show the probability of a cumulative 50 basis point rate hike over the next six months has risen to about 70%.
Fifth, cost pressure is intensifying: ASML plans to raise prices for lithography machine components supplied to South Korea by a uniform 10% starting in January 2027, intensifying investor concerns about semiconductor manufacturing profit margins.
Currently, market focus is shifting to the Korean semiconductor exhibition SEDEX 2026, which opens on October 14, where Samsung Electronics and SK Hynix will showcase next-generation memory solutions in hopes of boosting market confidence.
In addition, smartphone data have added to market concerns. Counterpoint data show global smartphone shipments in the third quarter of 2026 fell 20% year over year, the worst third quarter in 14 years. The reason is that rising DRAM and NAND prices have pushed up phone costs, reducing consumers' willingness to upgrade. Huawei executive Yu Chengdong said the cost per phone has increased by about RMB 1,343. Notably, Samsung previously reported that it will sharply cut fourth-quarter smartphone supply by 20% to 30% because of soaring memory prices. Counterpoint said manufacturers are reducing low-end shipments, raising prices, and prioritizing profit protection.
The optical communications sector continued its roller-coaster ride, giving back all of Friday's gains. Mizuho and Morningstar analysts attributed this to the OCP Summit technology demonstrations having already been priced in, Broadcom CEO Hock Tan's comment that "capital is the biggest bottleneck" raising concerns about the sustainability of AI capital expenditure, and an overall cooling of AI trades. Hock Tan and Intel CEO Lip-Bu Tan warned in Singapore the same day that capital and ROI have replaced chips as the biggest constraint.
Specific project actions and stock price moves:
Memory and chip stocks fell in tandem: Micron Technology dropped 3.88%, breaking below the $1,000 mark intraday and hitting a new low in a run of declines over the past seven trading sessions, as ChangXin's 4F² progress, combined with South Korea's post-holiday catch-up decline and the early end of large-scale buybacks by Samsung and SK Hynix, triggered a global memory selloff. SanDisk plunged 5.97%, SK Hynix ADR and Super Micro Computer fell more than 4%, and Seagate Technology, Intel, and Marvell Technology fell more than 3%.
The optical communications sector suffered a sharp drop: mainly because prior gains were too large and investors chose to take profits after the OCP Summit technology demonstrations. Ciena fell 9.95%, Lumentum plunged 9.78%, Coherent fell 7.87%, and Corning fell 6%.
Intel fell 3.20%: although the company has begun providing customers with samples of its GPU D series for the agentic AI era, CEO Lip-Bu Tan stressed in Singapore that capital costs and ROI uncertainty are the core challenges currently facing the AI industry.
Meta rose more than 3.38%: Meta released Muse Wonder and Muse Wonder Full, and Zuckerberg called it an important step toward the company's "personal superintelligence." The new models will be used to upgrade the personal AI agent Muse and will be monetized through $20 and $100 monthly subscription services. What the market values is the AI business model moving from the investment side to the revenue side. Alexandr Wang said the models can compete with ChatGPT and Claude.
Microsoft rose 1.14%: its total market capitalization returned above $4 trillion for the first time in a year, mainly because it announced that its next-generation Maia 300 in-house AI chip will be deployed at scale next year and that token output per megawatt is 40% higher than mainstream GPU systems.Apple rose 1.29%: The market is betting on its October 13 "Welcome Home" smart home event, where it is expected to unveil a new generation of Apple TV, HomePod mini, and the home hub HomeView. Dan Ives believes Apple's AI strategy could add about $75 per share to the company's valuation, with a price target of $400.
Next, key items to watch:
October 13 (Tuesday)
15:45 Fed Governor Waller speaks at the Bloomberg New Economy Forum: This is an important Fed signal before the U.S. CPI release. If Waller stresses that inflation remains sticky, Treasury yields and the dollar could strengthen, pressuring tech stocks; if he emphasizes that more data can be awaited, sentiment toward growth stocks may ease.
21:02 Apple holds its "Welcome Home" smart home new product launch: It is expected to unveil a new generation of Apple TV 4K, HomePod mini, and the home hub device HomeView. The market is watching whether Apple's AI can expand from phones to the home gateway, affecting Apple, consumer electronics, smart home, and on-device AI sectors.
UK Parliament AI safety hearing: Meta, Google, OpenAI, and Anthropic have been invited to attend, and representatives from the UK AI Safety Institute will also participate. If regulatory rhetoric becomes stricter, AI model companies and large tech stocks may face sentiment disruption.
The semiconductor industry's flagship event SEMICON West is held in San Francisco, running through October 15, and includes an advanced packaging summit: The market is watching for signals on semiconductor equipment, advanced packaging, wafer manufacturing, and supply chain expansion. This has reference significance for ASML, Applied Materials, Lam Research, and TSMC's supply chain.
Qwen AI glasses go on sale in stock: The market is watching whether AI glasses can become a new on-device AI gateway. If sales feedback is positive, it could boost consumer electronics, smart glasses, on-device chips, and AI Agent concepts.
Earnings: JPMorgan Chase, Goldman Sachs, Citigroup, Wells Fargo, UnitedHealth, Johnson & Johnson, and Domino's Pizza report results: Bank earnings will test net interest margins, trading revenue, and credit risk in a high-rate environment; UnitedHealth and Johnson & Johnson will verify the momentum of the healthcare sector. If bank credit losses rise, the market may trade a economic slowdown again.
October 14 (Wednesday)
The U.S. additional port fee on ships owned, operated, or built by China takes effect: This will affect shipping costs and the China-U.S. trade chain. The market is watching the impact on Chinese exporters, shipping companies, and car carrier-related names.
09:30 China September CPI and PPI released: If CPI and PPI improve, it indicates a recovery in domestic demand and industrial prices, which is favorable for A-shares, Hong Kong stocks, and pro-cyclical assets; if they remain weak, the market will expect more easing policy.
China September import and export data released, time TBD: The data falls on the same day the U.S. additional port fee on Chinese ships takes effect, making it a key window to observe front-loading of exports, re-export trade, and external demand resilience. If exports are stronger than expected, it is positive for ports, shipping, manufacturing, and China concept sentiment; if weaker, the renminbi and Chinese assets may come under pressure.
Korea Semiconductor Exhibition (SEDEX 2026), running through October 16: The theme is "Entering the Silicon Intelligence Era," and Samsung Electronics and SK Hynix will showcase next-generation memory solutions in an effort to boost market confidence.
Anthropic holds Pre-IPO investor day: The market is watching its revenue, cloud partnership costs, compute leasing contracts, and IPO timetable. If it discloses strong revenue growth, AI sentiment will be boosted; if cost pressure is too great, the market will continue to question AI commercial returns.
NVIDIA China Developer Day is held in Suzhou, running through October 16: The market is watching NVIDIA's statements on China ecosystem, developer tools, AI applications, and compute solutions. If there are new partnerships or product updates, it could affect discussions around AI applications and domestic compute substitution.
Earnings: Bank of America, Morgan Stanley, BlackRock, and ASML report results: Bank of America and Morgan Stanley will complete the picture of major bank earnings, BlackRock reflects global asset management fund flows; ASML is a core event in the semiconductor equipment chain, and orders and guidance will affect sentiment in the AI chip sector.