The U.S. stock market closed sharply higher, buoyed by strong earnings from Microsoft and a significant rebound in semiconductor stocks. As concerns over a slowdown in the artificial intelligence (AI) investment cycle eased, the South Korean market is expected to attempt a strong rebound, particularly in semiconductor stocks.
On July 30, the Dow Jones Industrial Average rose by 613.92 points (1.19%) to close at 52,208.06. The S&P 500 gained 121.48 points (1.66%) to finish at 7,437.63, while the tech-heavy Nasdaq Composite climbed 679.24 points (2.78%) to end at 25,122.18.
The market rally was driven by the strong performance of AI leader Microsoft, which reported earnings that exceeded market expectations, leading to a 15.51% surge in its stock. This positive momentum also lifted semiconductor stocks, with Micron rising 18.36%, SanDisk up 25.99%, AMD increasing by 13.00%, and Intel gaining 11.30%. The Philadelphia Semiconductor Index saw an 8.19% increase. In contrast, Meta Platforms fell 7.95% due to concerns over profitability amid increased capital expenditures this year.
The South Korean stock market is also expected to start strong, led by semiconductor stocks.
As of 8:32 a.m., pre-market trading on NextTrade showed Samsung Electronics up 14.25% and SK Hynix rising 17.10%. Other major stocks, including SK Square (16.40%), Samsung Electro-Mechanics (16.15%), Samsung Life Insurance (10.80%), Samsung C&T (9.69%), Hyundai Motor (5.70%), LG Energy Solution (3.44%), and KB Financial (1.49%), also showed strong gains.
Analysts believe that as concerns over the slowdown in the AI investment cycle and semiconductor de-leveraging ease, the South Korean market is likely to attempt a technical rebound.
Han Ji-young, a researcher at Kiwoom Securities, stated, "The earnings reports from Microsoft and Meta have significantly alleviated concerns about profitability in the AI sector. Coupled with expectations that large hedge funds will end their de-leveraging, U.S. semiconductor stocks have rebounded sharply. The South Korean market is also expected to attempt a rebound, supported by expectations of easing semiconductor de-leveraging and strong performance in KOSPI 200 night futures."
He added, "During the recent sharp decline, the market influence of single-stock leveraged products has diminished significantly. The visibility of semiconductor performance is improving through Samsung Electronics' conference call and the capital expenditure expansion trend among global big tech companies. Considering the potential for the end of semiconductor de-leveraging and the perception of excessive declines, the market is transitioning to a phase where upward factors are dominant."
* This article has been translated by AI.
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