Overnight risk was a chip story, not a macro one: Korea cratered, China faded on tech, Japan slipped modestly, and Hong Kong actually caught a bid.
South Korea's Kospi plunged as much as 11% intraday, triggering both a sell-side sidecar and a circuit breaker, as Samsung and SK Hynix were dumped on fresh doubts about the AI memory boom's sustainability, compounded by a blockbuster CXMT IPO in Shanghai that raised the specter of Chinese memory competition. The CSI 300 closed down 2.83% with tech and semis alone off 6.28%, while the Hang Seng bucked the tape, up roughly a third of a percent on utilities and consumer non-cyclical strength. Japan's Nikkei eased 0.65% and the Topix 0.63%, a relatively orderly session against the regional carnage. USD/JPY held firm near 163.7-163.9, the yen still pinned near multi-decade lows into Thursday's BOJ decision, while USD/CNH sat quiet in the mid-6.70s, PBOC keeping the yuan on a tight leash despite the tech rout at home.
US futures inherited the split-screen: Nasdaq-100 futures down roughly 1%, S&P 500 futures fractionally lower, Dow futures actually positive, as money rotated out of Nvidia, Micron, Applied Materials and TSMC into value and defensives ahead of a two-day FOMC meeting that opens today under Chair Warsh, with earnings from Boeing, Visa, Coca-Cola, Ford and PayPal adding noise. Fed-funds odds show a hold priced as the base case but not a lock, leaving Wednesday's statement and presser as the real catalyst.
The risk: if the Korea/China semiconductor unwind bleeds into US mega-cap tech before the Fed speaks, the value rotation stops cushioning the tape and SPY/QQQ trade with the Nasdaq rather than against it; a hawkish surprise from Warsh on top of that is the tail risk that turns mixed into outright risk-off.