Micron sinks 5.8%, with the chip sector down alongside it

Today's Market

On August 24 (local time) Micron (MU) -5.8% and the semiconductor sector -2.7% weighed on the market, leaving the Nasdaq -0.8% and the S&P 500 -0.3%. Strength in staples and financials left the Dow alone higher at +0.3%.

• Still, 275 S&P 500 constituents rose against 223 that fell — the opposite of the index direction — and the losses were concentrated in chips

• The steepest single-name declines were Moderna (MRNA) -4.3%, Datadog (DDOG) -4.2%, Tesla (TSLA) -3.8% and AMD -3.5%, with Ford (F) -3.3% after a threatened tariff on cars and trucks

• A report that the Treasury could tap its cash account to fund bond buybacks eased the Treasury yield to 4.704% and the long bond to 5.231%, while the VIX rose +4.8% to 15.85

• Nvidia (NVDA), Salesforce (CRM) and CrowdStrike (CRWD) earnings land alongside GDP and PCE on the 26th, the week's biggest test

Market Data

S&P 500

7,652.86

▼0.28%

NASDAQ

25,980.19

▼0.76%

DOW

53,417.16

▲0.26%

VIX

15.85

▲4.76%

Sector Heat Map

SPY benchmark + 11 GICS sectors · 1-day

S&P 500 SPY −0.29%	Technology XLK −1.78%	Comm. Svcs XLC +0.83%	Cons. Discr. XLY +0.24%
Cons. Staples XLP +1.70%	Energy XLE −0.83%	Financials XLF +1.29%	Health Care XLV +0.05%
Industrials XLI −0.69%	Materials XLB +0.07%	Real Estate XLRE +0.55%	Utilities XLU +1.05%

Today's Focus

A CXMT-Apple supply report set off a broad memory selloff 📉

A report that China's CXMT would supply Apple shook the memory price outlook for Micron and SanDisk from the pre-market on

• On the 22nd, surging memory prices had Nvidia customers notified of AI-related price increases — the opposite direction from today's move

• The indictment of an Nvidia manager in a Taiwan AI chip smuggling case also landed on the 24th, putting export-control risk back in view

• That said, one analyst called the two names' pre-market drop an "overreaction", and Nvidia's Groq 3 LPX production launch came the same day

• A Samsung-led chip selloff had already run through Asian trading ahead of it; the read on memory costs in Nvidia's earnings on the 26th is what to watch

Partial resumption of Hormuz transits

Iran allowed Iraqi tankers through, "easing supply concerns" and pushing oil -2.4%

• Crude flows partially resumed even with further U.S. sanctions on Iran flagged

• That said, Iran warned of fines and confiscation for tankers, so transit risk remains

Inside the Ticker

Alibaba -0.7% on the discounted placement, one leg of the Asia selloff

Alibaba Group BABA | $118.47 | 1D −0.7% 1W −5.0% 1M +5.6% 3M −8.0%

What happened

Alibaba slid from the pre-market and closed -0.7%

• Pre-market coverage named the discounted share sale as the reason; the placement itself was disclosed on the 23rd to fund AI investment

• It led the Asian selloff alongside Samsung, and is -5.0% over the past week

Why it matters

The price of the funding is existing shareholders' stake

• A discounted placement buys speed and leaves dilution behind, so the question is whether the AI capex race is worth that price

• What to check: the final terms and the discount, and the timetable for spending what was raised

This Week

ALL TIMES EASTERN (ET)

• Wed 8/26 GDP

• Wed 8/26 Personal Income & Outlays (PCE)

• Wed 8/26 NVDA earnings | EPS est $2.09

• Wed 8/26 CRM earnings | EPS est $3.27

• Wed 8/26 CRWD earnings | EPS est $0.29

• Fri 8/28 Michigan Consumer Sentiment

For informational purposes only. Not investment advice. All investment decisions are your own responsibility.

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