Ray: Good morning, this is Biscuits and Tickers for Thursday, October fifteenth. I'm Ray.

Nora: And I'm Nora. The AI trade is under pressure around the world this morning. South Korea's main index hit a circuit breaker, Nasdaq futures are pointing lower, and producer prices and retail sales land at eight thirty.

Ray: Start with where we closed. A hotter than expected inflation report knocked stocks lower on Wednesday. The S and P 500 fell 1.1 percent to 7,718.94. Xinhua notes that was its first drop of at least 1 percent in more than 50 sessions. The Nasdaq Composite lost 1.9 percent. The Nasdaq 100 fell about 2 percent, to just under 29,951. The Dow was almost flat at 51,621.

Ray: Small caps took it harder. Saxo says the Russell 2000 fell 1.9 percent and is now in correction territory. The VIX closed at 16.87, up more than 10 percent, and it was trading near 17.6 early this morning.

Nora: Futures are split. Early this morning, Nasdaq 100 futures were down roughly 1 percent and S and P futures were off a few tenths of a percent, while Dow futures were up about a third of a percent. Invezz and TradingKey both describe the same pattern: money is leaving technology for defensive blue chips.

Nora: Bonds are the twist. After CPI, the 10 year Treasury yield briefly jumped above 5.3 percent, then reversed the whole move. Saxo has it below 5.11 percent this morning, a three week low, as investors buy Treasuries for safety. The dollar also gave back its post CPI spike. The euro is near 1 dollar 12.

Ray: In commodities, Brent crude is around 104 to 105 dollars a barrel and W T I is near 95. A follow up on the Gulf: TradingKey reports that two cargo ships sank near the Strait of Hormuz after being hit by projectiles. Gold is up about 1 percent, near 4,140 dollars an ounce. Bitcoin is down about 1 percent, around 81 thousand dollars.

Nora: Today's calendar. At eight thirty Eastern, we get September producer prices, retail sales, weekly jobless claims, and manufacturing surveys from the New York and Philadelphia Fed. Invezz says economists expect headline P P I up 0.6 percent on the month, and core up 0.3 percent. Business inventories follow at ten.

Nora: On the Fed side, Chicago Fed President Austan Goolsbee speaks at ten Eastern. Cleveland Fed President Beth Hammack speaks at four thirty this afternoon.

Ray: Before the bell, these reported results above estimates, according to Robinhood's earnings calendar: Taiwan Semiconductor, Charles Schwab, PNC, B N Y, U S Bancorp, Prologis, Marsh, Ericsson and Commercial Metals. After the close, we hear from Interactive Brokers, J B Hunt Transport and Alcoa.

Nora: The top story is a global sell off in chips and AI. Korea JoongAng Daily reports the Kospi closed down 7.6 percent, its seventh losing day in a row. Program selling was halted at the open, and a full twenty minute circuit breaker hit after the index fell more than 8 percent. Samsung Electronics fell about 9.5 percent and SK hynix about 11 percent. Saxo says Japan's Nikkei fell 5.1 percent.

Ray: Analysts give three reasons. First, renewed rate hike fears after CPI. Second, a possible memory chip supply glut from China's C X M T, which follows up on Tuesday's story about the company. Third, the biggest one: doubts about how AI infrastructure gets paid for. Foreign investors sold about 2.7 billion dollars of Korean stocks.

Ray: The stress shows up in U.S. credit markets. CoreWeave, ticker C R W V, fell more than 15 percent Wednesday. Investing dot com says its bonds now yield more than 16 percent. TradingKey reports that Oracle's five year credit default swap spread widened to about 288 basis points. The Philadelphia Semiconductor Index fell 4.3 percent Wednesday, its sixth straight loss.

Nora: That puts the spotlight on Taiwan Semiconductor, ticker T S M. It reported a sixth straight record quarter. Net profit was 763 billion New Taiwan dollars, up about 69 percent from a year ago and above estimates. Revenue was about 46.7 billion U.S. dollars, up 41 percent.

Nora: TSMC guided fourth quarter revenue to 52.3 to 54.3 billion dollars, and sees 2026 sales growth of about 44 percent. But it was cautious on 2027, citing macro uncertainty and margin pressure from building overseas plants. TradingKey says the U.S. listed shares were still down about 2 percent before the open, so strong results are not stopping the selling for now.

Ray: Next, financials keep earnings season going. Charles Schwab, ticker S C H W, reported record results. Adjusted earnings were 1 dollar 69 a share, up 29 percent. Revenue was 7.2 billion dollars, up 17 percent, though Investing dot com says that was slightly below forecasts. Core net new assets were a record 190 billion dollars, and total client assets reached 13.3 trillion dollars.

Ray: PNC, B N Y and U S Bancorp all beat earnings estimates, according to Robinhood's earnings calendar. That follows Wednesday's mixed bank reports, including the Bank of America miss we covered yesterday.

Nora: One more story behind the move: inflation. September consumer prices rose 0.6 percent on the month and 3.7 percent from a year ago, against expectations of 3.6 percent. Saxo says energy drove the overshoot and core held at 2.6 percent. Market odds of a rate hike at the October 28th Fed meeting jumped Wednesday, briefly above 50 percent according to Saxo, before settling around 30 percent.

Nora: San Francisco Fed President Mary Daly said more increases are likely, but there is no urgency to decide this month. That makes this morning's P P I and retail sales numbers especially important.

Ray: Pre market movers. Penske Automotive, ticker P A G, is up about 8 and a half percent after agreeing to a take private deal at 212 dollars a share. Walmart, ticker W M T, is up more than 2 percent on a Deutsche Bank upgrade. Commercial Metals is up nearly 4 percent after an earnings beat. Kimberly Clark is up almost 2 percent on preliminary results.

Ray: On the downside, Rocket Lab, ticker R K L B, is down about 9 to 10 percent after delaying the first Neutron launch to 2027. CoreWeave is down about 6 percent. Micron is down about 4 percent, and Western Digital and Seagate are down too. Nvidia, A M D and Intel are down roughly 2 to 3 percent.

Nora: Sector rotation was clear on Wednesday. Health care and consumer staples each rose more than 2 percent, and energy gained almost 1 percent. Technology fell 2.6 percent and communication services 1.7 percent. Those were the only three of eleven sectors to rise.

Nora: What to watch today. P P I, retail sales and jobless claims at eight thirty. Whether the bond rally holds, with the 10 year near 5.1 percent. Whether chip stocks stabilize after the sell off in Asia. Goolsbee at ten and Hammack at four thirty. After the bell, Interactive Brokers, J B Hunt and Alcoa.

Ray: That's Biscuits and Tickers for Thursday. Everything here is information, not investment advice. I'm Ray.

Nora: And I'm Nora. See you tomorrow.