MARKET PULSE Bank Shares Fell After Their Results While Memory Stocks Kept Sliding The Dow fell 0.35% to 51,670 on Tuesday, the S&P 500 ended little changed and the Nasdaq slipped 0.15%. Memory makers weighed for a second day, and Micron (MU) fell 3.6%. All four banks that reported closed lower. Citigroup (C) fell 5.6%, Wells Fargo (WFC) 3.1% and JPMorgan Chase (JPM) 0.9%. Goldman Sachs (GS), up as much as 4% early, ended down 0.2%. Treasuries rallied as the cash market reopened after Monday's holiday. The 10-year yield fell to about 5.19% early, off last week's 24-year high, then gave some back. September consumer prices arrive Wednesday at 8:30 a.m. Eastern. Economists surveyed by FactSet expect a 0.5% monthly rise and 3.6% from a year earlier, with core prices up 0.2% from August. Investor Signal Kalshi's October hike contract rose to 22 cents from 17 before easing to about 20 by early afternoon. Its December quarter-point-hike contract traded near 74 cents. A hot core reading could put October back in play and test the bond rally. BANKS WATCH Goldman's Stock Desk Took In More From Lending to Traders Than Trading With Them JPMorgan, Goldman and Wells Fargo showed the same three patterns on Tuesday. Equities trading revenue rose from a year earlier at all three: 72% at Goldman, 49% at JPMorgan and 21% at Wells Fargo. Fixed income was flat to lower. At Goldman, equities financing, which includes prime brokerage, rose 96% to $3.37 billion. That topped the $3.08 billion from equities intermediation, its trading with clients. Financing revenue tracks how much clients borrow rather than how much they trade. Capital ratios fell at all three from June. Goldman's dropped to 12.4% from 12.9%, JPMorgan's to about 13.9% from 14.2%, and Wells Fargo's to 10.0% from 10.3%. JPMorgan cut net buybacks to $664 million. Credit pressure showed up in lending to companies. JPMorgan added $452 million to reserves in its corporate and investment bank. Goldman's $368 million provision came mainly from wholesale loan impairments. Wells Fargo's commercial charge-off rate rose to 0.18% from 0.10% in the second quarter, matching the year-earlier rate. Investor Signal At JPMorgan and Goldman, risk-weighted assets rose as their balance sheets expanded, while capital was roughly flat. Wells Fargo tied its decline to unrealized losses from higher rates. Bank shares entered the reports more than 14% below their August peak. Bank of America and Morgan Stanley report Wednesday, and matching patterns there would point to an industry trend. AI AND CHIPS WATCH Lenders Want to Share Their Data-Center Risk. Memory Stocks Kept Falling. JPMorgan, Morgan Stanley, Sumitomo Mitsui Banking and MUFG are exploring sales of data-center loan risk, the Financial Times reported. The report said they are nearing internal limits on AI exposure. Broadcom's chief, Hock Tan, said Monday that capital "might be the biggest constraint" on AI. He also said demand for computing exceeds supply and could stay that way through 2029. Korea's Kospi fell 5.46% to its lowest close since July 30. A 5% drop in index futures briefly halted program trading. SK Hynix fell about 10% and Samsung Electronics about 7.4% after a Chinese rival reported memory-chip progress. Investor Signal In Tan's account, demand is not the constraint. The open question is who pays for the buildout and at what price. Nvidia-backed Firmus shelved a $5 billion share sale last week. ASML reports Wednesday and Taiwan Semiconductor Thursday, and their results should show whether capital is slowing spending. FROM OUR PARTNERS This #1 stock for the next AI boom?
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Another saw weakness spread across its entire peer group.
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