Whatever you do this morning, don't look at the KOSPI Index.

South Korea's blue-chip index, the world's hottest stock market over the past year, is rattling Wall Street nerves again with a sharp overnight tech selloff. It suggests mounting concerns for the market's biggest driver heading into a crucial stretch of the second-quarter earnings season.

The KOSPI fell the most since early spring, dragging the benchmark to its worst monthly performance since the Asian financial crisis of 1997, on reports of a China-based firm ramping production of a high-end chipmaking machine.

Japan's Nikkei 225 also slumped -- taking it deeper into correction territory and now marked 13.8% south of its late June levels -- on concerns tied to valuations, debt, and circular financing in the global tech sector.

It doesn't bode well for U.S. stocks on Tuesday.

A deeper pullback in global crude prices and reports of more detailed talks between the U.S. and Iran haven't even been able to offset the broader tech concerns, which have weighed on markets for several weeks.

Nvidia shares are in focus following a big leap in debt protection costs tied to the chip maker's financing of around $1 billion in chip and AI computing deals.

The setup for markets is worrying ahead of Wednesday's massive slate of tech earnings, as well as a Federal Reserve rate decision, as stocks struggle to escape their monthslong stall.

Traders continue to expect the Fed to hold rates steady at between 3.5% and 3.75%, but a sizable 33% bet on a summer rate hike remains and the odds of a move higher in September are pegged at nearly 80%.

The next few days will be crucial -- and that's an understatement.

-- Martin Baccardax

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Chinese Memory Chip Maker's IPO Adds to Crowded Market

Sometimes three's a crowd. But when it comes to the memory boom, there's room, and plenty of demand, for more chip makers -- including China's ChangXin Memory Technologies, which debuted as a publicly traded stock on Monday, bringing one of Micron Technology's competitors public.

   -- The IPO surged 466% in Shanghai on Monday, giving it a market value of 
      $484 billion. It's already the most valuable company listed in mainland 
      China. Only Tencent, at $513 billion, sits above it on the Hong Kong 
      market. The debut underlines the strength of the memory-chip boom. 
 
   -- Shares of the three memory-chip giants, Micron, Samsung, and SK Hynix, 
      have enjoyed bumper gains over the past year. Micron's stock price is up 
      more than 700% over the past 12 months through Friday's close, SK Hynix 
      is up 580%, and Samsung has risen 285%. 
 
   -- CXMT's IPO comes as Apple has been pushing to use the chip maker's 
      products in devices sold in China. Apple has been lobbying the Trump 
      administration to ensure that CXMT doesn't end up on a trade blacklist, 
      The Wall Street Journal reported. Apple didn't respond to a request for 
      comment. 
 
   -- News that a Chinese company is producing immersion deep ultraviolet 
      lithography machines, a type of machinery used in making chips, weighed 
      on chip stocks. Morgan Stanley analysts Laura Wang and Vicky Wu say China 
      is "well on track" to become a primary innovation center for artificial 
      intelligence by 2030. 

What's Next: There's another new Chinese memory stock coming, too. Yangtze Memory Technologies, or YMTC, is expected to make its IPO this year. It remains to be seen what impact the existence of five publicly listed memory chip makers, up from three, will have on Micron, Samsung, and SK Hynix.

-- Callum Keown

Ford Motors Wants to Build an Army Truck as It Branches Out

Neither Ford Motor nor General Motors want to be just car companies -- for good reason. Both have been trying to morph beyond the industry, as in their reported race to build a new tactical truck for the Army. Both are also getting into energy storage for utility-scale power solutions.

   -- The news about the competition to build an Army truck was reported by The 
      Wall Street Journal. GM is also branching out into defense, bidding on 
      the truck and recently signing a deal with Lockheed Martin to leverage 
      GM's high-volume manufacturing expertise in the lower-volume defense 
      sector. 
 
   -- GM Defense was a compelling growth opportunity for the company, said CEO 
      Mary Barra on GM's July second-quarter earnings conference call, pointing 
      to the Chevrolet Colorado-based Infantry Squad Vehicle. Assuming Congress 
      appropriates the funds, the Army wants more than 10,000 ISVs, Barra said. 
 
   -- That's the use case Ford is bidding on, too, as the government looks for 
      lower-cost commercial suppliers. Auto makers have struggled with growth, 
      but the power business alone is seen boosting Ford's operating profit by 
      roughly $500 million by the end of the decade, analysts say. 
 
   -- General Dynamics' Combat Systems business, which makes the Abrams tank, 
      generates $10 billion in annual revenue and more than $1 billion in 
      operating profit. GM and Ford combined generate more than $360 billion in 
      annual sales, and are expected to generate $24 billion in combined 
      operating profit. 

What's Next: The potential for Ford and GM defense operating profit is likely measured in the hundreds of millions of dollars, if both auto makers are successful in selling more into the defense arena. Ford reports second-quarter earnings later today.

-- Al Root

Another Shipping Crisis on This Waterway Threatens Global Prices

Traffic through two of the world's most critical shipping lanes has been snarled by the Iran war, and now a third passageway is reducing capacity because of weather, with the potential to get worse. That could drive up prices for everything from oil and liquefied natural gas to home goods.

   -- The Panama Canal authority has warned that the chances of an El Niño 
      system, which can cause severe drought and other extreme weather, had 
      risen to 81% from 25%. Capacity in the canal linking the Caribbean Sea to 
      the Pacific Ocean is 34 vessels a day, from 36 previously. 
 
   -- But more severe restrictions could be coming, given the history of how an 
      El Niño affects the Panama Canal. The last time one hit in 2023 and 
      2024, transports were sometimes cut in half to 18 a day -- and this one 
      could be more extreme. 
 
   -- The canal is sensitive to droughts because it is fed by freshwater lakes 
      whose levels vary depending on rainfall. Navigating the canal during 
      severe droughts with lower water levels becomes much trickier, and the 
      authority limits how many ships can pass. 
 
   -- About 12% of U.S. goods traverse the Panama Canal by volume, according to 
      the United Nations. When transit routes are squeezed, consumers often 
      have to pay the higher costs, or wait much longer for products. 

What's Next: Ships that can't take European goods from the Red Sea's Bab al-Mandab Strait to Asia must go around Africa, adding weeks of time and millions more in fuel costs. Ships from Asia that can't use the Panama Canal must unload on the West Coast and pay for truck transport, or find another route.

-- Avi Salzman and Janet H. Cho

What Strategy Did Instead of Touching Its Bitcoin Stash

Strategy, the world's largest corporate holder of Bitcoin, kept its crypto stash of $55 billion Bitcoin horde untouched for the third straight week. Its latest actions signal that it is doubling down on its new financial plan and that common equity remains a key funding source.

   -- The software company-turned-crypto whale disclosed on Monday that it 
      didn't buy or sell any Bitcoin between July 20 and 26. It currently holds 
      843,775 Bitcoin purchased at an average of $75,476 each. 
 
   -- Strategy instead opted to sell roughly five million shares of common 
      stock, for $544.5 million. Strategy last month said it would 
      opportunistically buy and sell its own shares rather than issuing them 
      continuously. Shares jumped 7.6% on Monday, snapping a three-day losing 
      streak. 
 
   -- Its "Stretch" preferred stock, which trades under the ticker STRC, had 
      been its go-to method for funding Bitcoin acquisitions, but that engine 
      stalled amid Bitcoin's price decline and concerns over Strategy's ability 
      to cover its dividends. It repurchased 288,930 shares of STRC preferred 
      last week. 
 
   -- Strategy's U.S. dollar reserve balance to meet dividend and interest 
      commitments stood at $3.75 billion on Sunday. Chairman Michael Saylor 
      reiterated that share buybacks would be funded outside the reserve, and 
      said the objective is for STRC to trade near $100. It won't issue below 
      that. 

What's Next: Strategy's board has authorized up to $1.25 billion in Bitcoin sales to bolster the fund. Under the updated framework, Strategy has $975 million available to continue buying back preferred shares from the market and an additional $1 billion for common stock.

-- Mackenzie Tatananni and Janet H. Cho

-- Newsletter edited by Liz Moyer, Patrick O'Donnell, Rupert Steiner