U.S. stock futures edged lower on July 28 as Asian markets saw dramatic swings ahead of the open. South Korea's KOSPI index tumbled 10.8%, its steepest single-day decline in years, with SK Hynix (SKHY) and Samsung Electronics plunging, triggering a fresh wave of scrutiny over AI and semiconductor valuations. A 7.1-magnitude earthquake struck Kumamoto, Japan, forcing TSMC's (TSM) JASM facility to activate evacuation protocols. Investors are also bracing for Meta Platforms' (META) second-quarter earnings due after the closing bell.

Korea's KOSPI Crashes 10.8% as Semiconductor Rout Deepens

South Korea's KOSPI index plummeted 10.8%, with SK Hynix (SKHY) suffering heavy losses and Samsung Electronics tumbling in sympathy. Analysts pointed to a confluence of triggers: government-mandated deleveraging, an overdue correction in overheated semiconductor names, and headlines around China's domestic AI advancements. Some strategists cautioned the selloff could spill into U.S. markets. Adding to the unease, news that Nvidia (NVDA) provided a financing guarantee for OpenAI further fueled the debate over whether AI valuations have reached bubble territory.

TSMC Evacuates Kumamoto JASM Plant After 7.1-Magnitude Quake

A powerful 7.1-magnitude earthquake struck Japan's Kumamoto region, triggering evacuation protocols at TSMC's (TSM) JASM fabrication plant. TSMC said employee safety remains its top priority and that indoor and outdoor evacuations and headcounts were conducted per emergency response procedures. No major damage has been reported so far, though the quake could disrupt near-term production as equipment recalibration and in-process wafer inspections are required.

Meta Earnings on Deck: $100 Billion AI Capex Under the Microscope

Meta Platforms (META) is set to report second-quarter results after the close, with Wall Street expecting revenue to top $60 billion, driven by robust advertising growth. Investor focus, however, has squarely shifted to the return on its massive AI investments—the company's annual capital expenditure plan exceeds $100 billion, and the aggressive AI infrastructure spending is increasingly weighing on profit margins and free cash flow.

On the macro front, T. Rowe Price (TROW) U.S. Chief Economist expects the Federal Reserve to most likely hold rates steady over the next 12 months, but warned that the risk of additional rate hikes remains elevated, citing persistent pressures from energy prices, AI-driven demand, and a still-tight labor market.