Micron shares rose in premarket trading after plunging 13% on Tuesday. Sandisk also gained ground. But the damage from the previous session was severe. The semiconductor benchmark ETF dropped nearly 8%, the Nasdaq 100 lost 3.3%, and more than $1 trillion in market value was erased from the Nasdaq 100 over two sessions. The Dow, down just 0.1% on Tuesday, looked almost bored by comparison.

The market has been here before. A hot trade runs hard, everyone agrees it is the future, and then investors start to ask how much of the future is already in the price.

That question is especially uncomfortable in semiconductors because the sector has been the most crowded corner of the market in the first half of the year. The simplest explanation for the selloff is also the least glamorous: investors took profits. After a huge rally, some of them decided that half-time was a good moment to check the scoreboard and pocket a few chips. In finance, this is often described with great sophistication. In plain English, people made a lot of money and sold.

But there is more going on. The Federal Reserve is again making life harder for equity investors. Traders are now pricing in a greater chance of a second rate increase by the end of December, after Fed Chair Kevin Warsh stressed the need to contain inflation. The personal consumption expenditures index, the Fed's preferred inflation gauge, is due Thursday and is expected to rise to 4.1%, more than twice the central bank's target. Higher rates do not automatically kill growth stocks, but they do make investors less forgiving. They also make debt-funded expansion look less charming.

Micron is expected to post very strong numbers, with analysts looking for earnings of $20.83 a share on revenue of $35.85 billion. Its stock has soared more than 268% this year, even after Tuesday's fall. And yet, expectations may be the problem. A blowout quarter is no longer enough if everyone has already bought the stock on the assumption that a blowout is coming. Micron has fallen after six of its last eight earnings reports, even when results were excellent. 

However, Micron does not look absurdly expensive on future earnings, trading at around nine times expected 2027 profits. That is not the kind of multiple that screams bubble. 

China is also on investors' mind. The latest version of Zhipu's open-source AI model, GLM-5.2, has reportedly moved closer to the performance of leading closed U.S. models such as Claude 4.8 and GPT-5.5, while being cheaper to use. It is said to perform well on long coding tasks and agentic workflows, two areas that matter a great deal to AI developers and corporate buyers. The market remembers DeepSeek's polished release in January 2025, which jolted U.S. technology shares by raising similar questions about cost, competition, and the business model of AI. Every time a cheaper or more open model looks competitive, investors are forced to revisit the same issue: if AI becomes more efficient and more widely available, who captures the value? The chipmakers? The cloud providers? The software companies? The customers? Or, in the least convenient outcome for shareholders, everyone but the people who paid the highest price for the story?

Outside technology, today's session has other moving parts, though none with quite the same gravitational pull. Oil prices are falling, with Brent down around 2.2% to about $74. Donald Trump has criticized oil companies for not lowering gasoline prices faster and said he has instructed the Department of Justice to look into the issue.

FedEx is also under pressure after reporting weaker margins in its core delivery business. Cerebras Systems dropped sharply after warning that full-year profit margins would fall below first-quarter levels in its first report since going public. Alphabet is slightly higher after S&P Global said the Google parent will join the Dow Jones Industrial Average, replacing Verizon. 

Today's economic highlights:

See the full calendar here.

  • Dollar index: 101.670
  • Gold: 4,041
  • Crude Oil (BRENT): $75.04 (WTI) $71.02 
  • United States 10 years: 4.5%
  • BITCOIN: 62,744

In corporate news:

  • Qualcomm in talks to provide custom chip-design services to ByteDance, sources say. It will also acquire AI startup Modular.
  • Apple aims to expand its entertainment and streaming offerings, executive Cue says.
  • SK Hynix files for a potential $29 billion ADR offering on Nasdaq.
  • The NLRB orders Amazon to bargain with the Teamsters at its San Francisco facility.
  • Nokia integrates automated fabric technology into Amazon Web Services.
  • The US administration is pressing Meta to agree to AI safety reviews amid mounting security concerns, the New York Times reports.
  • Meta Platforms launches a new line of smart glasses.
  • Micron investors await earnings as the chip sector faces volatility.
  • Eli Lilly expects China approval for its GLP-1 pill as soon as 2026, according to an executive.
  • JPMorgan Funds win SEC approval for monthly repurchase offers.
  • Alibaba sues the Pentagon to contest its designation as a Chinese military company.
  • Nvidia's AI chips have more than doubled in price on the black market in China, according to the FT.
  • SpaceX sets the price for its first $25 billion senior bond offering.
  • Abbisko Therapeutics signs an R&D agreement worth up to $1.9 billion with Eli Lilly.
  • Alphabet, Google's parent company, will replace Verizon in the Dow Jones Industrial Average.
  • Boeing wins a contract from the U.S. Air Force worth up to $2 billion for satellite work.
  • Lockheed Martin secures an $8.4 billion contract amendment with the U.S. Army.
  • FedEx anticipates an 11% increase in revenue in 2026 following improved fourth-quarter earnings driven by strong pricing.
  • Nike appoints David Denton, former CFO of Pfizer, to lead its finance function.
  • Cerebras reports its first earnings, with margins lower than those of its AI chip rivals.
  • Ryan Cohen is walking away from a $35 billion compensation package at GameStop and wants management to focus on a proposed acquisition of eBay.
  • Today's key earnings reports: Micron Technology, Paychex, Raymond James Financial, The Berkeley.

Analyst Recommendations:

  • Nucor Corporation: KeyBanc Capital Markets upgrades to overweight from market weight with a target price of USD 274.
  • Stellantis N.v.: AlphaValue/Baader Europe upgrades to add from reduce and reduces the target price from EUR 6.30 to EUR 6.09.
  • Astera Labs, Inc.: Stifel maintains its buy recommendation and raises the target price from USD 260 to USD 460.
  • Boston Scientific Corporation: Jefferies maintains its buy recommendation and reduces the target price from USD 100 to USD 67.
  • Cognizant Technology Solutions Corporation: Daiwa Securities maintains its neutral recommendation and reduces the target price from USD 65 to USD 42.
  • DuPont De Nemours: Morgan Stanley maintains its equalwt recommendation and raises the target price from USD 156 to USD 468.
  • Fedex Corporation: Stifel maintains its buy recommendation and reduces the target price from USD 442 to USD 326.