A Korean AI data-center IPO flop sends the KOSPI down 4%

Good morning. Tuesday's rebound in U.S. tech didn't make it across the Pacific. Korean data-center operator Elice fell 32% on its trading debut, reviving AI fears, and the KOSPI dropped more than 4% while Japan's Nikkei lost 1.6%. Adding to the unease, three data-center IPOs backed by Nvidia, Blackstone and SoftBank have been postponed this month alone.

Wall Street, though, held up better than expected. The Dow rose 548 points, or 1.05%, to close near 52,500. Strong results from companies such as 3M and Northrop Grumman helped, as did lower oil on hopes for U.S.-Iran diplomacy. Tech lagged on AI credit worries, and GM slid after warning that next year will be rough.

The shift in where money is going is hard to miss. With more than 80% of S&P 500 companies beating third-quarter forecasts, cash is moving into financials, industrials, utilities and staples. Some call it a K-shaped market: the index rises, yet in most sectors more than half the stocks trail it.

The rate outlook got heavier. In a Reuters poll, nearly every economist expects the Fed to skip October and hike again in December, and forecasters see the 10-year Treasury yield staying above 5% through 2027. Housing is already frozen: pending home sales for September fell to a record low.