Dow up, Nasdaq down on chip selloff; KOSPI sinks 5.5% as AI worries spread
Tuesday, October 13, 2026 · as of Oct 13, 6:26 AM ET · covers the prior trading session
On Monday, a selloff in chip and networking stocks pulled the Nasdaq down 0.44% while the Dow rose 0.38% on defensive buying. The AI-valuation selloff hit Asia harder overnight, with the KOSPI down 5.46%. Markets are pricing a possible December Fed hike before Wednesday's CPI, and big banks report today.
Key numbers
What mattered yesterday
- The Dow added 0.38% to 51,850.55 while the S&P 500 slipped 0.06% and the Nasdaq lost 0.44%, as a selloff in chip and optical-networking names (Cerebras −10.69%, Semtech −10.15%, Ciena −9.95%) offset gains elsewhere. Tapeboard
- Money rotated defensive: Real Estate (XLRE) led sectors at +2.62% and Energy rose 1.43%, while Technology (XLK) fell 1.22%; the VIX rose 2.49% to 15.21. Tapeboard
- The AI-trade worries spread to Asia on Tuesday: KOSPI plunged 5.46% (Samsung −7.19%, SK hynix −10.09%) and the Nikkei fell 1.82% for a fourth straight loss, on AI-spending doubts and reports of progress at China's CXMT. Trading Economics
- November WTI settled up $1.89 at $93.74 on Monday, then fell about 2% overnight after Russia partly lifted diesel export limits. Brownfield
- The dollar index eased to about 102.3 after hitting an 18-month high near 102.6 on Monday; markets now see roughly a 72% chance of a 25bp Fed hike in December ahead of Wednesday's CPI. Trading Economics
Market snapshot
Why it mattered
Reported: There was no major US data release Monday (Columbus Day), and Treasury posted no yield curve for Oct 12, so the latest official 10-year reading is 5.24% from Oct 9 (US Treasury). Futures pricing reported by Trading Economics puts the odds of a hike this month near 19% and in December near 72%. Big banks begin reporting third-quarter results today.
Our read: Commentary, not investment advice. The market is now pricing tighter policy rather than cuts, and long-duration tech is taking the hit. Wednesday's CPI is the swing factor: a hot print would make a December hike the base case.
Today's calendar
All times ET, Tue Oct 13 (Trading Economics):
- Before the open (exact times TBD): earnings from JPMorgan, Goldman Sachs, Citigroup, Wells Fargo, Johnson & Johnson and UnitedHealth
- 3:45am: Fed's Waller speaks
- 8:15am: ADP weekly employment
- 10:00am: Existing home sales
- 1:00pm: Fed's Barkin speaks
- 2:00pm: Monthly federal budget statement
- 4:00pm: Fed's Collins speaks
- Later this week: September CPI (Wed 8:30am); PPI, retail sales and jobless claims (Thu 8:30am)
Business lens
Dairy: USDA's weekly survey (week ending Oct 3) had blocks at $1.4579/lb (down from $1.4955), butter at $1.3694 (from $1.3871), nonfat dry milk at $1.9369 (from $1.8692) and dry whey at $0.6814 (from $0.6757) (USDA AMS). September FMMO all-market averages: Class III $16.04 and Class IV $18.94 per cwt, compared with $16.64 and $17.36 in August. On Monday, CME spot blocks rose half a cent to $1.39, barrels held at $1.4525, butter fell half a cent to $1.27, NDM gained a quarter-cent to $2.27 and whey held at $0.86 (Brownfield). November Class III futures settled at $16.07, down 3 cents. Week-to-date direction: cheese slightly firmer and butter slightly softer, based on Monday's trading only.
Feed (Oct 12 settles): Dec corn $4.83 (+3¼¢), Nov soybeans $12.87¾ (−4¼¢), Dec soymeal $368.70 (+$3.10), Dec Chicago wheat $6.72¼ (+1¼¢) (Brownfield).
Fuel: US on-highway diesel was $6.199/gal for the week of Oct 5, down 18.3¢ from the prior week (EIA). This week's EIA update: unavailable.
Freight: unavailable.
Rates: 10-year Treasury at 5.24% and SOFR at 3.87%, with markets pricing hikes.
Our read: Commentary, not investment advice. Strong NDM is holding Class IV almost $3 above Class III even with butter near $1.27. Cheese in the high-$1.30s points to Class III staying around $16, while corn near $4.83 and meal near $369 squeeze cheese-based margins. Cheaper diesel helps, but a rate hike would raise the cost of any floating-rate equipment or operating debt.