Stocks Hold Ahead Fed Decision as Chip Shares Surge
Asian technology shares rose after SK hynix reported a sharp increase in quarterly operating profit, while investors awaited a US Federal Reserve rate…
Stocks hold ahead Fed decision as chip shares surged in Asia on Wednesday after SK hynix reported a 632 percent jump in third-quarter operating profit, while investors waited for the US Federal Reserve’s interest-rate decision. The gains lifted Seoul’s Kospi by 6.6 percent, even as oil prices rose above $115 a barrel.
The Fed’s decision and accompanying statements could shape expectations for interest rates and corporate growth. Investors are also watching results from Microsoft and Alphabet, with Amazon, Apple and Intel due to report on Thursday.
Markets were moving on two forces at once: optimism around artificial-intelligence spending and concern that higher oil prices or tighter monetary policy could weigh on businesses.
Chip shares lead gains
SK hynix said its third-quarter operating profit soared 632 percent to $62.8 billion, citing strong demand for advanced semiconductors. Its shares jumped almost 11 percent on Wednesday. Samsung, which is due to report earnings Thursday, rose nine percent.
The rally extended across Asia. Japan’s Kioxia gained nearly 14 percent, helping the Nikkei 225 advance 1.1 percent to 63,954.19. The Kospi closed up 6.6 percent at 6,012.44.
Wall Street’s chip companies also moved higher. Nvidia added 0.6 percent, AMD rose 2.0 percent and Micron Technologies climbed 5.1 percent. The Nasdaq Composite was up 0.3 percent as trading began in New York.
That is the immediate market impact: investors have pushed chip shares higher on evidence of demand, while upcoming earnings will test whether enthusiasm for AI-related investment holds across more companies. The Thursday reports could influence sentiment around the sector’s spending and revenue prospects.
There is a counterweight. Brent crude rose 1.2 percent to $115.23 a barrel, while West Texas Intermediate gained 1.9 percent to $101.76. The report linked the move to concerns about renewed fighting between the United States and Iran.
Fed decision in focus
Investors are looking for clues not only about the current rate decision but also about the possibility of an increase next month to cool inflation. Neil Wilson, investor strategist at Saxo UK, said the Fed “is set to hold rates steady but could signal the path to more hikes,” a prospect that could weigh on corporate profits and growth.
“For now, the rally in tech stocks is impervious to the rising oil price and the risks posed by political elections across the world, budgets and the Federal Reserve meeting this evening,” Kathleen Brooks, research director at trading group XTB, said.
David Morrison, an analyst at Trade Nation, said the Nasdaq had recovered its losses from the same time the previous week. Investors had been unsettled by Meta’s plans to increase AI infrastructure spending, according to the report.
Other markets also edged higher. The Dow rose less than 0.1 percent to 52,397.18, while the S&P 500 gained 0.2 percent to 7,737.86. London’s FTSE 100 added 0.2 percent in afternoon trading as the Labour government under Prime Minister Andy Burnham unveiled its first budget.
Investors were also awaiting the final outcome of Israel’s general election. Brazil’s currency and stock market had plunged after the surprise re-election of leftist President Luiz Inacio Lula da Silva, the report said.
The next market tests arrive with the Fed’s statements and Thursday’s earnings reports, as traders assess whether chip demand can sustain the rally while oil and rate risks remain in view.
Source: finance.yahoo.com
