The Tech Selloff Deepens

A tech sell-off deepens, even as anthropic and TSMC report blockbuster revenues. Plus, UBS mulls leaving Switzerland, or proposed new capital requirements. "I think it definitely gets the Swiss lawmakers to sit up when UBS is saying, 'Hey, we could just go and be a U.S. bank or we could be taken over by a large U.S. bank.'" And we've got the latest on the Trump administration's investigation into representative Ilhan Omar, as it seeks to strip her U.S. citizenship. It's Thursday, October 15th, I'm Luke Vargas, for the Wall Street Journal, and here is the AM edition of What's News, the top headlines and business stories moving your world today. Tech stocks are on pace for another rough day, after yesterday's brutal sell-off. Finance editor Alex Frankos says that what had been a relatively placid stock market in recent months is now facing threats from all sides. The market's not far off its records and been driven a lot by the continued excitement over the AI expansion and build out. Sometimes markets get a little bit spooked that things have gone too far. The proximate cause yesterday was an inflation reading that was hotter than expected, that caused people to ratchet up expectations for the Fed to raise interest rates, that hit AI companies that have a lot of debt and then that kind of trickled through the market. And there was some already some kind of latent jitters going on, they're the super, super high expectations for how fast AI is going to expand, how useful it's going to be in the economy, and how much money all the companies making the picks and shovels are going to make. And the market naturally gets a little worried sometimes that like, oh, maybe we've gone too far. Maybe these expectations are too high. Let's take our profits, let's go into something that's a little safer. And Alex, SELF is pretty indiscriminate with core weave and video and micron all down off hours. South Korea's tech heavy index falling 7%. And European AI stocks like ST Micro, Infinion, and even ASML, which reported gangbuster earnings yesterday, tumbling in early trade. Yeah, I mean, expectations are super high and right now the market's not in the mood for good news. They're basically sure I'm getting it off and saying, yeah, we don't care. That you have record profits. We don't care that you have demand until 2031 for your fancy lithography of machines that make the chips that power everything. They're basically saying expectations are too high for right now, but we've seen this before. I'd be the last person to predict that this is the beginning of the end or not the beginning of the end. I think we just really don't know, but it's definitely got people's attention. Well, one company countering those AI concerns is Taiwan semiconductor manufacturing. The world's largest contract chip maker today posted another record quarter with net profits surging 69% to just under $24 billion. That topped analyst expectations and marks six consecutive quarters of record earnings. Well, overnight, we also learned that anthropics quarterly revenue jumped 45% to nearly $17 billion. The company is preparing for a massive public debut as soon as next month, with investors expecting the claw maker to reach more than $110 billion in annualized revenue by year end. And India could soon see its largest ever listing as geo-platforms plans to raise more than $3 billion in an IPO that would value the telecom company at $108 billion. Owned by one of Asia's richest people, the company handles the majority of data traffic in a country with a population of more than 1.4 billion. The upcoming listing would come at a time when India has been hard hit by the energy shocks stemming from the U.S. Iran War, with the country's benchmark Sensex, one of the worst performing markets in Asia this year. We are reporting that executives at Zurich-based UBS, Switzerland's last remaining flagship global bank, are considering a once unimaginable move out of the country. Our Margot Patrick has more on this story. Margot, if UBS isn't Swiss, what is, I'm just curious, tell us what is prompting these contingency plans that you report are occurring inside the bank? So UBS is thinking about leaving Switzerland, which is where it's been since 1862. It's thinking about leaving because it is being faced with some quite punitive capital plans in the country. So Switzerland is beefing up. It's too big to fail banking law. So that was a response to the 2008 financial crisis and having to bail out UBS way back then. So in more recent years, another bank failed Credit Suisse and that was in 2023. And so the Swiss lawmakers, the Swiss government decided that it needed to add to those laws and make sure that there wasn't going to be any risk to the taxpayer of the big bank going under. So for UBS, what this means is it's facing much higher capital charges in the country. And so what options are under discussion besides just seeing it, but probably we don't want to be here anymore? Yeah, so just try to not have to hold quite so much capital. UBS is thinking about where else could it go. And the most attractive place it could probably go is to the US because the US has quite a stable regime for banking regulation and it also has the world's largest wealth market. So UBS really wants to tap into more rich US customers. And it's been trying to do that for years and this could be the impetus. This could be the trigger for it to take a big step and really think about getting bigger in the US, either through a merger with a smaller bank or take over a smaller bank or a merger with a much larger bank is even possible. Would that be an attractive proposition to US firms? Is there something UBS could bring to the table that's particularly valuable there? Yeah, the reason why UBS is really attractive to some of the big American banks is because it has this international wealth clientele. The US banks are very big in US wealth management, but they're not as big in international wealth management. So a lot of them would love to tap into UBS's big client base in Asia, in the Middle East, in Europe, in Switzerland even. What does the likelihood any of this actually occurs? I asked because albeit it's a very different industry, but we recently saw a paramount threatened to leave Hollywood if it couldn't settle its antitrust suit with California, which ultimately was able to resolve and it's not going to move. Is it possible UBS is floating this is a way of pressuring Swiss lawmakers to reconsider their next steps? Yeah, I think it definitely gets the Swiss lawmakers to sit up when UBS is saying, hey, we could just go and be a US bank or we could be taken over by a large US bank. Swiss politicians have to think, well, what would that mean for Switzerland? But so far they haven't really backed down. The Swiss finance minister has said that for UBS to leave the country would really probably cost more than to stay. Some analysts have been talking about things like exit taxes that UBS might have to pay. So UBS might have to, you know, way up those extra costs and it could decide that staying where it is is really the best option. Reporter Margot Patrick covers international banks for us out of London, Margot, thank you so much for bringing us this story. Thank you. And a heads up that we've got a special bonus episode coming later today in the next once news and earnings we'll be looking at how Wall Street trading and deal making are powering bank results and how rising borrowing costs are casting a shadow on that profit engine. That'll be in your what's news feed at midday. Coming up a glimpse inside Gaza at how Israel's military is expanding its footprint there just weeks ahead of Israeli elections. That story and more after the break. With Israeli elections less than two weeks away and Prime Minister Benjamin Netanyahu's party facing a tough fight, the Israeli military is continuing to dig in and fortify its military presence in Gaza. Netanyahu has rejected President Trump's peace plan and Israel now has over 30 outposts in the devastated enclave, including nine fortifications that it's built since an October 2025 ceasefire on a rare embed with the military journal reporter Anat Palad was able to visit the outskirts of Gaza City, which sits on the so called yellow line dividing the enclave from Hamas controlled territory. So we were taken to this neighborhood, Chejia, and it was really a scene of destruction. I couldn't see a building standing in eyesight of the yellow line. So Gaza has been split into two since the October 2025 ceasefire. And Israel was in control of 53%, and now it has actually expanded its control to around 70%. What I did see also around me were two military outposts. So Israel has been building up these outposts all over Gaza, only in the Israeli controlled area of Gaza, and it says it is defensive outposts. It's aimed to protect Israel after the October 7th, 2023 attack, which killed around 1,200 people in Israel and saw around 250 hostages taken, Israel drew a conclusion that it needs to basically move the threat farther away. It needs to have more military presence to protect its soldiers and its civilians. From satellite imagery, we can see that there are temporary structures inside, and soldiers use these bases, they sleep in them, and there isn't a lot of fighting right now in Gaza between Israel and Hamas. However, Israel has continued to strike, and more than a thousand Palestinians have been killed since that ceasefire. But Israel is doing a lot of demolitions, it has used the period of the ceasefire to continue doing these demolitions. It says that it is destroying what it calls militant infrastructure. And it not says that despite U.S. pressure on Netanyahu to move to Gaza. The next phase of President Trump's peace plan, little progress can be seen on the ground. - So specifically, it is very concerned with tunnels. And when I was in Gaza, I was taken into one of these tunnels that it discovered, and the military actually said that this was only part of the tunnel, that it continued towards the Hamas control territory. We're told by officials that progress is stalled on this plan at the moment. So that is basically Hamas's disarmament, Israel withdrawing from Gaza and Gaza's future governance. And we aren't expected to see anything really moved dramatically until after the October 27th elections in Israel. And in the meantime, Gazans are stuck. They are still living in an ever shrinking territory in Gaza. And aid is coming in, but the situation is still very dire from a humanitarian perspective in terms of healthcare and other things. So it is a very difficult situation. And at the moment, there is no progress. To read more of a nots reporting, and watch a video of her trip into Gaza, check out the link we've left in our show notes. (upbeat music) We are reporting that the Trump administration's investigation into Minnesota Democratic representative, Ilhan Omar, is aimed at building a case that could see her US citizenship stripped and her ultimately deported. Omar's DC home was searched on Monday by federal agents who removed her cell phone, notebooks, personal computers, and passport. And we report that among other things, authorities are looking into her family's immigration paperwork, including the actions of her deceased father who brought her and other family members to the US in 1995 from a refugee camp in Kenya. Omar, as said, she never committed immigration fraud, and her office yesterday accused the president of wanting to eliminate a progressive voice from Congress. The Trump administration has made an unprecedented effort to denaturalize US citizens by proving they lied in the process of obtaining citizenship. Doing that isn't easy and requires proving in federal court that a person lied in a material way to gain their citizenship, and most of those cases brought by the Justice Department this term haven't yet been decided. And speaking of DC and the law, we are exclusively reporting that new White House press secretary Katie Zachariah hasn't passed the bar exam in the US, despite regularly calling herself a lawyer in public appearances. And the president, referring to her as an attorney, when he announced she'd be taking on the role. People who identify themselves as lawyers or attorneys or claim to be able to provide legal services without being admitted to the bar can face criminal charges in some states. When asked by a reporter this week, in which state she passed the bar exam, Zachariah said, quote, "When I moved to China," end quote. That likely refers to Zachariah's 2011 move to Beijing to work at a prominent Chinese law firm, where she was advised that she could provide legal analysis based on her pepperedine law degree and her international transaction experience. A White House official said that Zachariah wasn't hired by the president to work on legal matters. And finally, stagnating pay, competition from autonomous taxis and the soreness costs of gasoline, car insurance, and new vehicles have prompted more than 50,000 drivers to sign up for the newly certified California gig workers union, hoping that doing so will enable them to demand a bigger share of fair revenues. Economics reporter Paul Kiernan says that for now, the union doesn't have formal leadership or a list of demands, but its formation would give drivers leverage to negotiate for benefits, better wages, and a process to appeal deactivations, which happened to Uber and Lyft drivers without knowing why. Uber and Lyft haven't fought this union. In part, that's because the two companies have already achieved their biggest policy goal of keeping drivers classified as independent contractors rather than employees. Employees, the US, are entitled to minimum wages, workers' compensation, and other rights. Independent contractors are not. So Uber and Lyft think it's pretty crucial to their business model to maintain their drivers as independent contractors. But industry analysts say it may also be that Uber and Lyft are at risk of being replaced by autonomous taxi services like Waymo, and they likely see the unions as potential partners in slowing down the expansions of those services through regulation. It remains to be seen if the union will prove an effective tool for drivers to negotiate better pay. If some drivers go on strike, for instance, it would probably be pretty easy and pretty financially rewarding for other drivers to just hit the streets and pick up the surge pricing. As a result, the number of drivers I spoke with are skeptical of the union. But others think it's worth a shot. And that's it for what's news for this Thursday morning. Today's show was produced by Hattie Moyer and Daniel Bach, our supervising producer, his Sandra Killhoff, and I'm Luke Vargas for The Wall Street Journal. We will be back tonight with a new show. And until then, thanks for listening. (upbeat music)