Bloomberg盘前综述：CXMT 4F² DRAM进展引发的存储芯片抛售已进入第二日，银行股财报分化，无单一新增可交易催化

US equity futures held firm Tuesday despite a deepening selloff in chipmakers, as traders sorted through a slew of bank results from JPMorgan Chase & Co., Goldman Sachs Group Inc. and other lenders in the start to third-quarter corporate earnings season.

Futures contracts tied to the S&P 500 Index were down less than 0.1% as of 7:50 a.m. in New York, after the benchmark was little changed on Monday near a fresh record. Nasdaq 100 futures fell 0.7%, as a selloff in chipmakers extended for another day. An exchange-traded fund tracking chipmakers tumbled nearly 2% premarket, with Micron Technology Inc. and US-listed shares of SK Hynix Inc. respectively sliding 3.8% and 5.5%. Sandisk Corp. was off 4.5%.

China’s CXMT is narrowing the technology gap with Samsung Electronics, SK Hynix and Micron — the world’s biggest memory chipmakers — raising the prospect of greater competition that could erode the three DRAM giants’ pricing power and market share. Other chip-related shares traded lower. Nvidia Corp. was down 0.8% premarket. Advanced Micro Devices Inc. and Broadcom Inc. fell 1.7% and 1.5%, respectively.

Read more: Cracks Grow Across the AI Trade as Memory-Chip Stocks Tumble

What will the outcome of midterm elections mean for US stocks and Treasury yields? Let us know.

Among other individual stocks, JPMorgan Chase — up just 3.8% this year through Monday — rose 1% premarket despite reporting a surprise drop in fixed-income trading revenue in the third quarter. Goldman Sachs climbed 3.3% after its equities traders blew past expectations in the third quarter. US banking stocks are already in a correction, with the KBW Bank Index down 12% from its mid-August peak.

Citigroup Inc. and Wells Fargo & Co. also report before the open.

“Banks are still willing to lend, spreads are narrowing, and companies are asking for more credit despite elevated rates,” wrote Jeffrey Roach, chief economist at LPL Financial. “Inflation and geopolitical risks could still cloud the outlook, but companies appear willing to look past some of the uncertainty when growth opportunities are good enough.”

Corporate America is now navigating one of the strongest profit cycles in recent history. Yet investors are growing uneasy about whether massive AI spending will pay off, especially as a higher cost of capital raises the hurdle rate for investment.

Negative headlines — including a warning on issues with funding the AI buildout and ‘casino’-like market sentiment from Broadcom CEO Hock Tan — come at a time when investors have piled into the trade. That said, other nooks of the AI trade were stable Tuesday, with Apple Inc., Microsoft Corp. and Alphabet Inc. all drifting higher premarket.

Fund managers in Bank of America’s latest survey are the most exposed to technology stocks since the rebound from the Covid pandemic six years ago, with 37% overweight the sector. About 45% of respondents agreed that there will be an AI bubble in 2027, while 42% don’t see a bubble.

Read more: Fed’s Goolsbee Says AI Boom Starting to Push Up Prices: Semafor

The S&P 500 has advanced at a pace of about 1.3% per month so far this year. How would a shift in control of Congress affect that rate of gains? Let us know.

But nothing seems to faze traders lately. The S&P 500 hasn’t posted a 1% decline in 52 trading days through Monday. If the trend continues through Tuesday’s closing bell, it would mark the longest such stretch since January 2020, data compiled by Bloomberg show.

Oil prices fell as the price of Brent crude declined to around $104 a barrel even though escalating tensions in the Middle East continued. That is still higher than the roughly $72 per barrel in late February before the Iran war. Energy shares were muted, with ConocoPhillips and ExxonMobil Holdings Corp. mildly higher premarket.

The latest report on the consumer price index is due on Wednesday, followed by the producer price index on Thursday. The S&P 500 is projected to swing 0.75% in either direction on Wednesday, options-market data compiled by Citigroup Inc. show.

Sectors in Focus

Of note, Johnson & Johnson fell 2.3% premarket after reporting more anemic growth in the company’s medical device business, though it raised its profit guidance thanks to demand for newer drugs in cancer and autoimmune diseases. Meantime, UnitedHealth Group Inc. rose 2.2% in early trading on an upbeat outlook. Elsewhere, Syndax Pharmaceuticals Inc. plunged 10% premarket after the biotech said a phase 2 trial of axatilimab failed to meet its primary endpoint of annualized rate of decline in forced vital capacity in a rare lung disease. VF Corp. rose 3.6% premarket after Piper Sandler and Truist Securities upgrade the retailer to buy-equivalent ratings, noting the company’s Vans brand is at an inflection point.