The Opener
Published
Overnight the market's geopolitical risk split, energy strength against tech weakness, gave way to a sharper and more specific stress point: memory and storage chips. SK hynix fell 4.8%, Western Digital dropped 4.2%, Seagate slid 4.0% and Sandisk declined 3.7%, a broad premarket selloff across the storage supply chain that goes well beyond the isolated Sandisk weakness seen in yesterday's close. AST SpaceMobile is off 3.5%.
Not everything is under pressure. Nordson is up 3.5%, the WisdomTree Cloud Computing Fund gains 2.8%, MSCI adds 2.1%, UnitedHealth rises 2.1% and the Invesco S&P MidCap Momentum ETF is up 2.0%, suggesting the rotation out of risk assets overnight is selective rather than market-wide.
On the diesel diplomacy front, the Kremlin pushed back hard on European criticism of the Witkoff-Kushner plan to let Russia export more than 2.25 million barrels of diesel, calling the EU's objections cynical given that European states remain active buyers of Russian oil. Moscow also said it sees no link between the US export deal and its stance on Ukraine peace talks, a direct rebuttal to the idea floated yesterday that the deal could soften Russia's negotiating position. Separately, the Russian Embassy in France called France's seizure of the tanker DF Peak a violation of international law, another flashpoint in the broader standoff over sanctioned shipping. Zelenskiy is now expected to attend an EU summit Thursday, per a German government official.
Fed Governor Christopher Waller said artificial intelligence could contribute to widening GDP per capita and that real yields are reflecting the impact of real growth, comments that lean into the AI-infrastructure debate still playing out in credit markets after reports that JPMorgan and Goldman Sachs trimmed their exposure to a major AI data center loan.
Elsewhere, the Bank of Japan is reportedly unlikely to raise rates again this month. BMW reported third-quarter deliveries of 551,072 units, down 6.3% year over year, while Stellantis's CEO said the company sees several partnerships worth exploring. Germany's Chancellor Friedrich Merz called for comprehensive pension reform, saying the country is at least 30 years behind on the issue. Maersk and Hapag-Lloyd will relaunch their FM1 shipping service.