Chip stocks reignite, Japanese stocks rise nearly 2%, Korean stocks show a V-shaped rebound and rise nearly 2%, SK Hynix's blockbuster listing effect spreads across Asia-Pacific.

Optimistic expectations for AI demand once again outweighed concerns about the Middle East situation and inflation, leading Asia-Pacific chip stocks to rebound on Thursday, though South Korea’s stock market saw roller-coaster movements again.

Seoul’s composite index opened up 3.3% on Thursday, then the gains further expanded to 4%, but soon narrowed sharply to about 2%. The Nikkei 225 also quickly expanded its gain to 1.9%. The MSCI Asia-Pacific index overall rose about 1%. Nasdaq 100 futures had previously fallen but later turned up 0.2%.

The direct catalyst for this round of rebound was SK Hynix’s US listing subscription data—oversubscribed more than seven times, far exceeding market expectations, driving its Seoul-listed stock price up 6.6% in a single day, with SK Hynix surging more than 9% during the session.

Meanwhile, escalating tensions between the US and Iran pushed oil prices to rise for three consecutive days, reigniting inflation concerns, as the US 2-year Treasury yield approached its year-to-date high.

Chip stocks experience sharp volatility

Earlier this week, the semiconductor sector was under selling pressure. Samsung Electronics announced a 19-fold surge in profits, but this impressive figure still failed to move investors, with its stock price under pressure.

However, on Thursday, the Seoul composite index surged more than 4% during the session, then quickly narrowed to 0.2%, rebounded to 2%, casting a shadow over the optimism seen in the morning.

Nomura Securities Senior Strategist Takashi Ito said: “Although the Middle East situation remains a concern, the market does not believe it is time to withdraw entirely from stocks. The mainstream logic is that investors can continue to hold AI and chip stocks—expected long-term return in these areas remains high.”

Bloomberg strategist Mark Cranfield also noted that this is a clear signal to those investors who retained their “ammo” during the 20% pullback in Seoul’s composite index since the June peak. He wrote: "Traders will watch whether trading volume exceeds average and whether gains are held at closing, to confirm if this constitutes a bullish turning point—but the sharp narrowing of gains currently leaves this validation unresolved."

Kioxia also attracted attention. Bain Capital announced the full divestment of its holdings in this flash memory chip manufacturer, and Kioxia’s stock price immediately surged 10%. Notably, Kioxia’s stock has gained more than 650% so far this year.

Middle East situation: Oil prices up three times, inflation concerns reignited

Meanwhile, macro-level pressures have not dissipated.

The US launched a second round of strikes against Iran; Brent crude rose for three consecutive days and broke $79 per barrel. US Central Command said on social media this strike was “to further weaken their ability to threaten freedom of navigation in the Strait of Hormuz.”

The rise in oil prices directly triggered inflation concerns. On Wednesday, the currency market had already moved expectations for the Fed’s next rate hike forward from December to October.

Senior strategist Ed Yardeni warned that the collapse of the US-Iran ceasefire deal could trigger a new round of accelerated inflation, forcing the Fed to raise rates passively.

However, eToro market analyst Zavier Wong was comparatively calm: “We’ve already gone through several rounds of escalation and de-escalation, so the market is used to this. Oil prices rising due to new tensions is not surprising, but the current price is far from the level at the initial outbreak of the conflict.”

Bond market: Yields approach year-to-date highs

Pressure in the bond market should also not be overlooked.

The 2-year US Treasury yield, most sensitive to Fed policy expectations, rose 5 basis points to 4.23% during Wednesday’s US stock trading session. The 10-year US Treasury yield also rose 4 basis points, reaching its highest since the end of May.

Minutes from the Fed’s June 17th meeting show that some officials believe there are reasons to raise rates, though the ultimate decision was to keep rates unchanged. Overall, the minutes reflect that while concerns about the labor market have eased slightly, inflation worries are rising.

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