THE MORNING MOMENTUM Tuesday, July 28, 2026
🌅 PRE-MARKET SNAPSHOT (as of ~9:00am ET)
A genuine crisis of confidence in AI spending hit Asian markets overnight — the US chip selloff has stabilized somewhat since, but the story isn't over.
Index | Change |
|---|---|
SPY | +0.1% |
QQQ | −0.7% |
DIA | +0.9% |
IWM | +0.1% |
📰 WHAT YOU NEED TO KNOW
South Korea just had one of its worst days in years. The Kospi crashed 10.84% to 6,023.66 overnight — Samsung fell 13.4%, SK Hynix over 14.7%. Japan's Nikkei fell 3.95%, with SoftBank down 4.4% and Advantest down more than 10%. The trigger: growing doubts about "AI circular financing" — the practice of AI companies investing in and buying from each other in ways that inflate reported demand without necessarily reflecting end-user revenue. This comes right after Nvidia announced a $500 billion AI memory chip supply agreement with SK Hynix on Monday, which itself sent Nvidia down nearly 5% that day.
By this morning, Nvidia has stabilized — essentially flat now (2.9x normal options volume) after Monday's ~5% drop, but the broader chip complex is still under real pressure: Intel is down ~4.9% (2.4x normal options volume), AMD down ~4.2% (2.2x volume), and Amkor Technology down over 11% (2.8x volume).
The Dow is actually higher, confirming a real divergence. Salesforce, 3M, and Sherwin-Williams led Monday's gains, and the Dow is up again today — this is specifically a chip/AI-infrastructure story, not a broad market selloff.
The FOMC's meeting concludes tomorrow (Wednesday) at 2pm ET, with rate-hike odds having risen meaningfully in recent days on oil-driven inflation concerns — though the weekend's Iran strike pause should ease some of that pressure. Four of the "Magnificent 7" report earnings this week.
Earnings season keeps beating big. With 27% of S&P 500 companies reporting, 83% have beaten estimates by an average surprise of 8.7% — full-quarter growth estimates have been revised up to 36% from 22% at the start of the season. UPS beat this morning (revenue $22.8B vs. $21.81B estimate, EPS $1.76 vs. $1.66), up ~0.7% on 2.5x normal options volume.
🎯 MOMENTUM PLAYS TO WATCH — Confirmed by Options Flow
INTC & AMD — Down 4.2-4.9%, both confirmed by 2.2-2.4x normal options volume — the real, ongoing chip-sector pain today.
AMKR — Down over 11% on 2.8x normal options volume — the sharpest confirmed move in the group.
NVDA — Essentially flat, but 3.2x normal options volume — notable stabilization after Monday's drop, worth watching for direction.
KO & IQV — Up 3.8% and 11.0% respectively, both confirmed by 2.2-2.5x normal options volume — genuine bright spots away from the chip story.
📅 TODAY'S CALENDAR
FOMC meeting continues, with the decision tomorrow at 2pm ET. Watch for any follow-through on the "AI circular financing" concern and whether it spreads further into US trading.
⚡ TRADER'S NOTE
This is the most significant single overnight move we've covered all month — a 10.84% single-day crash in a major index is rare. Worth watching closely whether "AI circular financing" becomes a lasting narrative shift or a one-day Asian-market shock that fades, the way several other scares have this summer.
⚠️ DISCLAIMER
This newsletter is for informational and educational purposes only and does not constitute financial, investment, or trading advice. Always do your own research and consult a licensed financial advisor before making investment decisions.