The $26 Billion Hangover 📉

Welcome back to the Day Trading newsletter 📈

Monday was ugly, Korea's chip giants cratered hard enough to halt trading in Seoul and drag Wall Street's whole AI complex down with them.

But this morning brought a plot twist: a surprisingly cool inflation report and a wave of blowout bank earnings.

Let’s get into it 👇️ 

📉 Inflation cooled far more than expected in June, with headline CPI falling 0.4% on the month — the biggest monthly drop since April 2020 — bringing annual inflation down to 3.5% from May's 4.2%. Core inflation was flat, at 2.6% annually. Fed Governor Christopher Waller cautioned it'll take several more months like this before rate cuts are back on the table.

🏦 America's biggest banks crushed second-quarter expectations Tuesday morning, with all five giants reporting before the bell. JPMorgan earned $6.14 per share vs. $5.85 expected, Goldman Sachs blew past estimates at $20.98 vs. $14.48, and Bank of America beat on both lines. Citigroup posted its best quarterly revenue in a decade — and the stock still fell 2%.

🛢️ Oil spiked Monday after President Trump said the US is reinstating its blockade on Iranian shipping through the Strait of Hormuz — and demanded a 20% "reimbursement" on cargoes passing through. WTI jumped 9.4% to settle at $78.14 — its biggest gain since April — while Brent closed at $83.30, and GasBuddy now sees $4-a-gallon gas nationwide within 7–10 days.

📊 AppLovin tumbled 12% Monday, making it the worst performer in the S&P 500 — with no company-specific news to blame. The AI ad-tech darling has now fallen five straight sessions, down roughly 19%, as high-multiple AI names get sold hardest whenever the trade wobbles. CEO Adam Foroughi sold about $51 million in stock in June.

🚀 SpaceX shares sank 4.24% Monday to a fresh post-IPO low, closing in on their $135 offering price. The stock is down sharply from its June 16 high of $225, when a 40% two-day post-IPO surge briefly valued the company above Amazon and Microsoft. Even last week's Nasdaq-100 inclusion couldn't stop the slide.

🔼 Tower Semiconductor surged nearly 19% premarket Tuesday after unveiling a $3 billion expansion in Japan, backed by $1 billion in Japanese government support. The Israeli chipmaker will build out silicon photonics capacity — the light-based tech that speeds data between AI processors — and now targets $3.6 billion in revenue by 2028.

🔻 Bitcoin slipped back below $63,000 Monday, giving up Friday's recovery as US-Iran hostilities escalated over the weekend. The retreat snapped a budding rebound from crypto's worst month in four years, and bitcoin now trades roughly $56,000 below its level a year ago. Ethereum fell alongside it.

🥇 Gold fell nearly 3% Monday to around $4,001 an ounce — a strange move for a "safe haven" during a week of open US-Iran conflict. The metal has now dropped about 7% in a month and sits well below January's record near $5,600. It stabilized near $4,070 Tuesday morning.

Three days after pulling off the biggest US listing ever by a foreign company, SK Hynix's Seoul-listed shares collapsed 15.4% Monday, their worst single-day drop on record.

The plunge dragged the Kospi down 8.95% to 6,806.93, below 7,000 for the first time in about two months, and triggered a 20-minute market-wide trading halt the company's new Nasdaq ADRs lost another 9% Monday after popping 13% in Friday's debut.

The culprits: heavy profit-taking on a stock that had fueled the AI-memory rally, fresh share supply from the $26.5 billion ADR sale, and a brokerage forecast that Q2 operating profit (despite projecting a more than sixfold jump from a year ago) would come in below the market's consensus.

Samsung and SK Hynix together make up roughly 40% of the Kospi's weighting, so when they sneeze, Korea's entire market catches a cold. Monday's halt was the latest in a string of Kospi circuit breakers this year.

The selloff also went global: Micron fell 4%, SanDisk tumbled 12%, Intel dropped 6%, and AMD slid 4% as investors again questioned how much of the AI-memory boom is already priced in.

The lesson: after a year of parabolic gains, the AI trade is crowded enough that even a "disappointing" sixfold profit surge can spark a rout.

What to watch: 

• The bleeding may already be slowing. SK Hynix erased an early 9% slide Tuesday to close higher in Seoul, Samsung rose 3.3%, the Kospi finished up 0.7%, and Micron jumped about 3% in premarket trading after this morning's cool CPI print.

• The real test is SK Hynix's actual Q2 earnings later this month, and whether Korea's margin-stretched retail investors, who are being forced to sell shares bought with borrowed money, turn every bounce into another selling opportunity.

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⚠️ Disclaimer: Not financial advice. Do your research before making any trades.