SK Hynix Blowout Lifts Tech as Fed Set to Hold at 3.75%

SK Hynix beat expectations for its third-quarter earnings, its stock rose 11%, and South Korea's KOSPI closed up 6.63% — the clearest signal yet that AI chip demand is still carrying global tech markets.

Nasdaq futures moved higher this morning on the news. S&P 500 futures were flat after the index rose in the previous two sessions. The benchmark sits within touching distance of its all-time high. Traders are waiting for the Fed's interest rate decision later today.

What does the Fed decide today?

Fed governor Kevin Warsh is expected to keep rates on hold. The CME FedWatch index of Fed futures shows a 91% expectation that the central bank will hold rates at the 3.75% level, which explains why equity markets are drifting rather than moving sharply in either direction.

The Fed decision carries extra weight because of Warsh's history with the institution. In August, in his inaugural speech as central bank chairman at Jackson Hole, Warsh invoked the hiking expeditions — walking hikes, not interest rate hikes — he once took in Wyoming with Mark Carney and Donald Kohn. Kohn, then vice chair of the Federal Reserve Board of Governors, did not know at the time that his rigorous treks had earned a nickname among peers: the "death march." Fortune's Eleanor Pringle explains how those hikes gave the world's most powerful central bank policymakers a place to talk freely.

Where did markets stand this morning?

• S&P 500 futures up marginally, 0.08%; the index rose 0.6% yesterday.
• Europe: the Stoxx 600 fell 0.13% in early trading; the U.K.'s FTSE 100 fell 0.26% before lunch.
• Asia: KOSPI up 6.63%; Japan's Nikkei 225 up 1.08%; India's Nifty 50 down 0.15%; China's CSI 300 up 0.85%.
• Brent crude at $115 per barrel.
• Bitcoin declined to $81,418.

Why is Oct. 27 a spooky date for stocks?

Oct. 27 is usually the worst day of the fall period for U.S. stocks, which often take an inexplicable seasonal dive at this time of year, according to Deutsche Bank. The fall dip effect is more pronounced in a year with midterms, DB's Jim Reid says. Once the elections pass, it is usually "one-way traffic" upward for stocks, he said in an email. The S&P 500 made gains over the next three months in 21 of the last 23 midterm years, according to the bank's Binky Chadha and Parag Thatte. Pimco's Libby Cantrill explains the mechanism: traders love it when political uncertainty is replaced by the guaranteed inaction of congressional gridlock. "The difference between a Democratic sweep — a Democratic House and Senate — and a split Congress — a Democratic House and a Republican Senate — are just not all that different. Under either, President Trump still has veto authority regardless," Cantrill told Fortune via email. "Under either scenario, we expect to see more oversight, more obstruction, and incrementally higher spending."

Who won the jet fuel shock?

Southwest Airlines was the only winner. After the Iran war started, the world did not run out of jet fuel, as some feared, but airlines absorbed higher costs with mostly negative results. Jet fuel "is often the largest or second-largest cost item for airlines. In 2025, it accounted for 27% of total operational costs on average. This share could move towards 35% in 2026," according to ING's Rico Luman. Of the airlines he tracks, all suffered reduced operating profits this year due to Middle East supply shortages — all except Southwest, the only carrier to post a gain in earnings before interest and taxes.

Is AI finding more security holes?

Yes, in record numbers. The PHP internet vulnerability discovered last week by two firms using AI models from OpenAI and Google is the tip of the iceberg, according to Karim Mattar at ARK Invest. In June, about 1,500 high- and critical-severity vulnerabilities were disclosed by various organizations — three and a half times the record before Anthropic launched Claude Mythos Preview in April. "AI can surface vulnerabilities rapidly, [and] attackers are likely to exploit weaknesses more quickly, forcing organizations to patch their software systems more often," Mattar said in a note.

The number of the day: 180 million

That is how many bags of coffee beans the world consumes annually, according to Goldman Sachs intern Samuel Jönsson and his colleagues Lina Thomas and Daan Struyven. Each bag weighs 60 kilograms (132 pounds), totaling 1.08 billion kilos (23.8 billion pounds) of coffee.

One more thing: a $1 billion inheritance fight

Wingspan Legacy Partners founder Christina Wing told Fortune about a high-net-worth couple, Jose and Natalia, both in their eighties, living in San Francisco with assets over $1 billion. Jose, an accountant by training, founded a successful private equity firm. Years ago the couple gave each of their four children a significant gift — about $25 million each. "The children have always assumed they would inherit most of the estate when the parents die," Wing writes. "Here's the secret: They won't." The conversation did not go well.

Elsewhere: Americans are expected to spend a record $13.5 billion on Halloween, pushing one in four revelers into debt, and a judge ruled Trump's farmworker pay cut — which moved $2.5 billion a year from workers to growers — illegal, with back pay possible.

With the Fed nearly certain to stand pat and the midterm-driven seasonal dip behind it, the market's next move likely hinges on whether SK Hynix's AI-fueled momentum can pull the S&P 500 through its record high.