A Chinese chip spooked Micron.

Good morning. Monday the S&P 500 slipped 0.06% to 7,807.24 and the Nasdaq fell 0.44% to 27,245.90, while the Dow added 0.38% to 51,850.55, as a 2.7% slide in chip stocks offset gains in energy and Meta (AP; CNBC). Overnight the chip selloff moved to Asia: Seoul's Kospi closed down 5.5% and Tokyo's Nikkei 1.8% (Yahoo Finance; CNBC). S&P 500 futures are roughly flat, Brent is near $105.12, and Bitcoin is near $83,900. Big banks report before the open, and the bond market is back from its holiday.

Stocks and VIX are Monday's close. Yields are Friday's Treasury closes (the bond market was closed Monday for Columbus Day; it reopens today). Futures and oil as of ~3:44 AM ET Tuesday vs. Monday's settle. Crypto as of ~3:55 AM ET Tuesday, vs. its 24-hour open. Nikkei and Kospi are Tuesday's closes. Stoxx 600 is Tuesday's session, live at ~3:39 AM ET.

One-line read: A flat S&P 500 hid a chip selloff that closed deep in Asia; Nasdaq futures are still soft, oil is giving back Monday's jump, and Treasuries trade again today.

ChangXin Memory Technologies (CXMT), China's biggest maker of DRAM memory chips, said over the weekend that it plans to deliver a next-generation server memory product by year-end, the South China Morning Post reported (via CNBC). Investors read that as more competition for the companies that own today's memory boom. Micron fell 3.9% to $989.04, SanDisk 6.0% and Seagate 3.8%, and the PHLX Semiconductor Index dropped 2.7%, its lowest close since Sept. 18 (Yahoo Finance; CNBC). The S&P 500 barely moved, because energy, staples and a handful of megacaps did the lifting. Then Seoul opened. The Kospi closed down 5.5% at 6,035.35 after dipping below 6,000 to its lowest level since July 31, with SK Hynix down 10.1% and Samsung 7.4%, and Korea's exchange briefly halted program trading (CNBC; Yahoo Finance).

The numbers: PHLX Semiconductor Index 12,236.79 (−2.67%). Arm −4.2%, Marvell −3.4%, Intel −3.2%, AMD −2.3%, TSMC ADR −2.0%, Broadcom −1.9%, Nvidia −1.3% (Yahoo Finance). On the other side: Meta +3.4% to $742.96, Apple +1.3%, Microsoft +1.1% to $541.15 (Yahoo Finance). Technology Select Sector SPDR (XLK) −1.2%; eight of the 11 sector SPDR ETFs rose, led by energy (XLE) +1.4% (Yahoo Finance). Overnight, Japan's Kioxia, Tokyo Electron and Advantest were among the biggest losers in Tokyo, and European chip stocks followed lower in early trade (CNBC).

Why it matters: Memory chips are close to a commodity, so their prices swing with supply, and new supply from China is the oldest worry in the business. If you own an S&P 500 or Nasdaq-100 fund, chipmakers are a large slice of it, and Monday showed a flat index can hide a 2.7% drop underneath. CXMT gave no detailed specs or exact launch date (SCMP via Yahoo Finance), so this is a plan, not a product.

What to watch: Whether Nasdaq-100 futures, down about 0.7% at ~3:44 AM ET, recover any ground before the 9:30 AM ET open.

JPMorgan Chase, Goldman Sachs, Wells Fargo and Citigroup report before the open today, and Dow member UnitedHealth is also on deck (CNBC). Per LSEG data, analysts expect double-digit earnings growth at JPMorgan and Wells Fargo, and about 10% revenue growth at Goldman (CNBC). FactSet puts S&P 500 earnings growth for the quarter at 29.6%, which would be a fourth straight quarter above 25% (CNBC). Into the reports, JPMorgan closed Monday at $334.30 (+0.4%) and Citi at $131.92 (+1.8%) (Yahoo Finance).

Why it matters: Banks are the first read on loan demand, credit and dealmaking. They are also core holdings in value and dividend funds, and in any S&P 500 fund. Bank of America and Morgan Stanley report later this week (CNBC).

Brent settled up 1.8% at $106.65 and WTI up 2.1% at $93.74, Brent's highest close since Sept. 15 and WTI's since Sept. 24 (CNBC; Yahoo Finance). Saturday's attack on Riyadh's main airport killed 12 people, and President Trump said the US may join Saudi Arabia against the Houthis: "We may. We're going to look at it" (CNBC). Doubts about the weekend's Russia-Ukraine "energy ceasefire" added to the bid (CNBC). The Energy Select Sector SPDR (XLE) touched an intraday all-time high, and closed up 1.4% at $66.01 (CNBC; Yahoo Finance). Overnight, both benchmarks are down about 1.4–1.7% (WTI $92.16, Brent $105.12), as traders weigh prospects of more Russian diesel against the Saudi–Houthi conflict (CNBC).

Why it matters: Oil feeds gasoline, airfares and the inflation numbers the Fed watches, and Wednesday brings September CPI. Energy is the sector that rises when the rest of your index fund flinches at oil.

The Treasury market trades again today after Monday's Columbus Day close; the 10-year last closed Friday at 5.24% (US Treasury). Cleveland Fed President Beth Hammack, a voter this year, said Monday that "a restrictive monetary policy stance is appropriate to ensure a timely return to 2 percent inflation" (CNBC; Cleveland Fed speech). Fed officials Christopher Waller, Tom Barkin and Susan Collins speak today (CNBC). Meanwhile the dollar index closed at 102.58, its highest close since April 2025 (Yahoo Finance; Reuters).

Why it matters: The 10-year sets the tone for mortgage rates and bond-fund prices, and a stronger dollar trims the overseas sales of US multinationals and the returns on an international stock fund. CME FedWatch (as of ~3:41 AM ET Tue) puts an ~83% chance the Fed holds at the Oct 28 meeting and an ~86% chance of a hike by the Dec 9 meeting (current target 3.75–4.00%).

The dollar hit its highest close since April 2025. For context, the dollar index ended 2025 at 98.28 and bottomed at 96.22 on Jan. 27; Monday's 102.58 is up 4.4% this year. Notice the round trip: the index fell 12.5% from its January 2025 high to that January 2026 low, and has since won back nearly half of the drop, including a 3.9% climb from a Sept. 9 low of 98.77.

Source: ICE US Dollar Index (DXY) daily closes via Yahoo Finance, Jan 2, 2025 – Oct 12, 2026. Reuters also reported the index at its highest since April 2025.

DRAM is the short-term working memory in every phone, laptop and AI server. It holds what a chip is working on right now, and AI servers need a lot of it. Each bit lives in a tiny cell, and today's mainstream cells take up an area engineers call "6F²." A "4F²" cell stands the transistor on its end, so more cells fit on the same slice of silicon (SCMP via Yahoo Finance). Think of switching from parallel parking to parking nose-in: same lot, more cars. Denser chips mean more memory from each factory, and more supply tends to mean lower prices. That is why a Chinese company announcing a plan, with no specs and no launch date, can take nearly 4% off Micron. Per the same report, Samsung is targeting mass production of its own 4F² memory by 2028.

That's the desk. See you tomorrow at 6 AM ET.

— The Overnight Desk Team

Note: The Overnight Desk Team may hold positions in assets discussed. Nothing here is investment advice. · Sponsor: No one paid for any mention in this issue.