Nasdaq slips before Fed as South Korea drops 8%
Published on July 29, 2026
Nasdaq futures are slipping this Wednesday ahead of the Fed's rate decision, due at 2pm ET. It's been a rough night for chip stocks: South Korea's Kospi lost more than 8%, dragged down by SK Hynix and Samsung, and Nasdaq futures are down roughly 1% before the US open.
Why Nasdaq is sliding ahead of the Fed
Two stories are colliding today. First, the Fed hands down its decision at 2pm ET and nobody is entirely sure what happens next. Traders now price in nearly a 38% chance of a rate hike according to CME FedWatch, up from just 10% in early July, a level several strategists quoted by Reuters and Benzinga call unusually high. Jim Bianco of Bianco Research put it plainly: market pricing closed today with a 38% probability of a hike, so it is not that far from Citadel. At Citadel, Frank Flight, head of macro strategy, expects Fed Chair Kevin Warsh to surprise markets with a quarter point hike. On the other side, Bill Adams, chief US economist at Fifth Third, expects a fifth straight hold at 3.50%-3.75%.
The real overnight shock: South Korea and chip stocks
The other story, the one actually moving the indices this morning, came out of Asia. South Korea's Kospi tumbled more than 8% overnight according to wire reports, its worst session in years, with SK Hynix down 12.6% and Samsung Electronics off 8%. The trigger: fear of a bubble in AI related spending. Nvidia is reportedly in talks to backstop $250 billion of OpenAI's data center financing in Ohio, an arrangement investor Michael Burry summed up by saying the industry was going around and around, with Nvidia effectively financing its own customers to buy its own chips. Jim Cramer called it a dot com bubble sequel. The fallout dragged Nasdaq futures lower and hit Micron (-8.9%), AMD (-8.1%) and Applied Materials (-7.8%).
Dow Jones holds up on solid earnings
Unlike the Nasdaq, the Dow is holding its ground, helped by strong corporate results. Coca-Cola raised its full year guidance after beating second quarter estimates, and Visa also reassured investors. Tuesday, the Dow gained 1.20% to close at 52,839, while the S&P 500 rose 0.43% to 7,444 and the Nasdaq Composite managed just 0.08%. That gap, a rising Dow and a stalling Nasdaq, shows the rotation moving away from tech and toward more traditional names.
Key levels today
| Instrument | Level (support / resistance) | Change | Scenario / What to watch |
|---|---|---|---|
| S&P 500 | Support 7,200-7,319 / Resistance 7,500-7,540 | -0.3% (futures, daily) | A hawkish surprise from the Fed opens the door to 7,319-7,200. A confirmed hold could spark a relief rally toward 7,500-7,540. |
| Kospi (South Korea, the angle's asset) | 5,531.56 points, multi month low | -8.2% (prior session, daily) | Watch for stabilization in Asia tonight as an early signal before the US open. |
Economic calendar
- 2:00pm ET: Fed rate decision. If the hold at 3.50%-3.75% is confirmed, expect a relief bounce on the indices. If the hike surprises markets, the Nasdaq selloff could accelerate.
- 2:30pm ET: Kevin Warsh press conference. A softer tone on September would support gold and stocks, a harder line would lift the dollar and weigh on equities.
- Thursday, 8:30am ET: US Q2 advance GDP estimate and June PCE price index, the Fed's preferred inflation gauge. A hotter PCE reading would revive bets on a September hike.
The bottom line
Two forces are colliding on the indices today: unusually high uncertainty around the Fed's decision and a real shock in chip stocks out of South Korea. Trimming position size ahead of 2pm ET beats betting on which way the surprise breaks.
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This is not investment advice. The information in this article is provided for informational purposes only.