Micron −11%, SMH −6.5%, BofA says hike in September — what PCE Thursday decides...

TUESDAY MARKET UPDATE

South Korea's market crashed 10% overnight. Circuit breakers fired twice. The chip trade that powered your S&P fund from 6,600 to 7,500 is unwinding in real time. SpaceX is now below its Day 1 opening price. This is the first real test of the post-war rally.

🟥 | Kospi crashed 9.99% — circuit breakers triggered twice; Samsung and SK Hynix led the rout.

🟥 SpaceX fell to $147 — below its $150 opening-day price; down 32% from $208 peak in 7 sessions.

🟩 Defensives rallying — IBM +4.2%, Public Storage +4.4%; the growth-to-value rotation is real.

Gold & Macro

BOFA SAYS HIKE IN SEPTEMBER. GOLD HEARD IT

Gold at $4,129 this morning. Down 1.5% from yesterday. Not catching a safe-haven bid despite the worst global chip selloff in months. That tells you exactly what's driving this metal right now — and it isn't fear. It's rate expectations.

Here's what changed overnight. Both Deutsche Bank and BofA (Bank of America) revised their forecasts to include a rate hike in September — moved forward from October. BofA's headline: “The Fed is fed up with inflation and will bring down the hammer with a series of rate hikes this year”. A series. Not one. The dollar surged to a 13-month high on the news. Gold cracked below $4,150.

Thursday's PCE — the Fed's preferred inflation gauge — is now the most important data point of the month. If core PCE comes in hot, the September hike becomes consensus and gold tests $4,000. If it cools, gold bounces. Silver at $67 is tracking lower with the industrial selloff.

The Trade

KOSPI CRASHED 10%. SPACEX IS BELOW DAY ONE. YOUR CHIPS ARE ON FIRE

South Korea's Kospi fell 9.99%. Circuit breakers triggered twice. Samsung and SK Hynix led the crash. It went global from there: SMH (the semiconductor ETF) fell 6.5%. Micron dropped 11.4%. Nvidia fell 3.2%. Taiwan Semi lost 5.2%. SpaceX hit $147 — below its first-day opening price of $150. In 7 trading sessions it lost 32% from its $208 peak. The $2.5 trillion valuation is now closer to $2 trillion.

Nationwide's Hackett said it clearly: investors had been “hovering with their finger over the sell button”. The SOX has erased over $1 trillion in market cap since Broadcom missed on June 4. Oracle just disclosed it cut 21,000 jobs — spending billions on AI while firing thousands. That's the paradox of this cycle: the companies building AI are shrinking their workforces.

But the rotation is real. IBM hit all-time highs. Public Storage rose 4.4%. Accenture gained 3.3%. Money isn't leaving the market — it's leaving growth and finding quality. That's Warsh's regime shift in action. When rates go up, valuation matters again. And the most expensive names pay first.

What to watch:

Today after close: FedEx earnings. Wednesday: Micron earnings — the week's most important print — plus Nvidia's shareholder meeting. Thursday 8:30 a.m.: May PCE inflation + Q1 GDP third estimate.

Heat Check

Nathan’s Take

“Oracle is spending billions on AI and firing 21,000 people. SpaceX is below its opening price 11 days after the biggest IPO in history. The market isn't correcting — it's re-pricing what growth is worth when rates go up”

Names to Know

MICRON, SPACEX, IBM

Micron Technology $MU ( ▼ 13.18% ) — plunged to $1,074 ahead of Wednesday's earnings; pressured by the Korea crash and pre-earnings profit-taking.

SpaceX $SPCX ( ▲ 0.98% ) — fell to $147, below its Day 1 opening price of $150; KeyBanc initiated at “sector weight” (neutral); down 32% from $208 peak.

IBM $IBM ( ▲ 4.94% ) — hit all-time highs as the growth-to-value rotation accelerated; AI consulting demand + defensive positioning.

Nvidia $NVDA ( ▼ 3.77% ) — fell to $202 in the global chip selloff; shareholder meeting Wednesday; stock down 10% from May highs.

Public Storage $PSA ( ▲ 0.5% ) — REITs catching a bid as investors rotate into rate-sensitive defensives while yields ease on the Iran deal.

For real-time data, I recommend monitoring Finviz.

The Macro Edge

🇰🇷 | South Korea's Kospi crashed 9.99% — circuit breakers triggered twice; Samsung, SK Hynix led; South Korean retail unwinding AI memory positions.

🤖 | Oracle disclosed it cut ~21,000 jobs over the past year — “as AI adoption reshapes its workforce”; spending billions on AI while firing thousands.

🏛️ | Both Deutsche Bank and BofA revised forecasts to include a rate hike in September — moved forward from October; hike narrative accelerating.

🚀 | SpaceX expected to get fast-track Nasdaq-100 approval within a month — index inclusion would force passive fund buying despite the selloff.

🛢️ | Iran shipped 30+ million barrels of crude last week as the 60-day oil export license takes effect — Hormuz transit increasing daily.

FedEx tonight. Micron tomorrow. PCE Thursday. The next 72 hours decide whether this is a rotation or a reckoning.

Nathan Reed | Profits & Insights