The U.S. stock market closed higher for the third consecutive trading day, buoyed by the Federal Reserve's decision to hold interest rates steady and a strong performance in semiconductor stocks. However, following earnings reports from Microsoft and Alphabet, stock prices fluctuated in after-hours trading, increasing market interest in profitability and cash flow amid expanding investments in artificial intelligence (AI). In South Korea, the recent surge in semiconductor stocks and the upcoming Samsung Electronics conference call, along with major corporate earnings announcements, are expected to be key factors.
On October 28, the Dow Jones Industrial Average rose by 97.53 points (0.19%) to close at 52,475.10. The S&P 500 gained 21.38 points (0.28%) to finish at 7,743.98, while the tech-heavy Nasdaq Composite increased by 72.04 points (0.27%) to end at 26,549.85.
During its October Federal Open Market Committee (FOMC) meeting, the Fed decided to maintain the benchmark interest rate at 3.75% to 4.00%. Following last month's rate hike, the Fed did not signal any immediate changes, and Chairman Kevin Warsh did not provide clear indications regarding a potential rate increase in December. While the market viewed this decision as largely expected, the CME FedWatch tool indicated an increased likelihood of a December rate hike at 85.0%, up from 78.3% the previous day.
Semiconductor stocks showed strong performance, with Micron rising 5.86% following positive earnings from SK Hynix, and American Depositary Receipts (ADRs) for SK Hynix soaring 13.30%. The Philadelphia Semiconductor Index climbed 1.76%, marking its fourth consecutive day of gains. Oracle's stock rose 10.73% after it set revenue targets for fiscal year 2030 and projected a return to positive free cash flow by fiscal year 2028.
In contrast, the earnings reports from big tech companies led to mixed stock movements. Microsoft exceeded market expectations for quarterly revenue and earnings per share (EPS), resulting in a 3-4% increase in after-hours trading. Conversely, Alphabet's quarterly revenue fell slightly short of expectations, and its cash flow worsened, leading to a drop of over 10% in after-hours trading. Analysts suggest that while demand for AI infrastructure remains strong, the differentiation in stock performance may depend on whether increased investments translate into improved cash flow.
International oil prices rose amid escalating geopolitical tensions in the Middle East. West Texas Intermediate (WTI) crude for December delivery increased by $2.88 (3.00%) to settle at $102.78 per barrel on the New York Mercantile Exchange. Brent crude for December delivery rose by $1.44 (1.00%) to $115.32 per barrel on the London ICE Futures Exchange. Concerns that the U.S. may intensify attacks on Iran following the midterm elections on November 3 contributed to the price increase. The yield on the U.S. 10-year Treasury note rose by 3 basis points to 5.03%.
In the South Korean market, attention is expected to focus on semiconductor stock trends and major corporate earnings following the recent surge. As of 8:39 a.m., shares of Samsung Electronics (-0.83%), Samsung Electro-Mechanics (-2.45%), and LG Energy Solution (-4.62%) were declining, while SK Hynix (0.40%), SK Square (0.33%), and Samsung Biologics (1.02%) were rising.
During the trading session, the Samsung Electronics conference call and earnings announcements from Hyundai Motor, Samsung SDI, and Hanwha Aerospace could influence market dynamics. Notably, SK Hynix's recent earnings report and conference call provided greater visibility on long-term memory demand, raising expectations that Samsung Electronics could enhance market confidence through updates on long-term supply contracts, pricing negotiations, and long-term sales volumes.
Han Ji-young, a researcher at Kiwoom Securities, stated, "Today, the domestic market is expected to open lower due to short-term profit-taking following a 6% surge and the mixed after-hours stock movements of Microsoft and Alphabet. However, during the session, we anticipate a shift to a sector differentiation market as we digest the Samsung Electronics conference call and earnings events from Hyundai Motor, Samsung SDI, and Hanwha Aerospace."
* This article has been translated by AI.
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