Seoul Stock Exchange Plummets 8% Following Samsung's Q2 Earnings Report

Asian stock markets opened lower, led by the Seoul Stock Exchange which dropped about 8%, primarily due to declines in semiconductor stocks Samsung and SK Hynix. Tokyo's market fell 2%, Hong Kong lost 0.7%, and Shanghai declined 1%. The sharp fall followed Samsung's strong preliminary Q2 financial results, which showed expected revenue of 171 trillion won (approximately 112.2 billion USD), reflecting a 129% year-on-year increase. Samsung projected an operating profit of 89.4 trillion won (58.4 billion USD) for the quarter, a 19-fold increase compared to 4.7 trillion won in the same quarter last year. This extraordinary profit forecast raised investor concerns about the sustainability of the recent surge in memory chip stocks, which have soared hundreds of percent over the past year.

Meanwhile, oil prices rose slightly after reports of an Iranian attack on a tanker near Oman while passing through the Strait of Hormuz. Brent crude traded around 72.5 USD per barrel, and US crude near 69 USD per barrel. On Wall Street, the New York Stock Exchange opened the week with gains: the Nasdaq rose about 1.1%, the S&P 500 advanced 0.7%, and the Dow Jones hit a record high above 53,000 points for the first time. Technology and communication sectors led the gains, while defensive sectors such as consumer staples, infrastructure, and healthcare declined about 1% or more.

Chip stocks rebounded after last week's selloff, with the SOXX ETF rising 2.7% following a 10% drop over two days. Leading chip companies such as AMD, Qualcomm, TSMC, and Broadcom saw notable gains. Memory chip stocks showed even stronger recovery, with Seagate, Western Digital, and Micron rising significantly. The DRAM ETF jumped 6.5% after a 6% decline last week. Ameriprise Financial's chief market strategist Anthony Scaglione told CNBC that expectations for chip stocks are very high, and while he does not expect the same upside in the second half of the year, strong fundamentals could still drive moderate gains. He also predicted volatility between AI-related stocks and the broader market depending on earnings confirmations.

Microsoft faced negative attention after announcing layoffs of 4,800 employees, 2.1% of its workforce, including cutting 3,200 jobs in its Xbox division by fiscal year 2027, as part of efficiency measures amid AI era challenges. Conversely, Dell shares surged after former President Donald Trump publicly endorsed the company, urging people to buy Dell computers at an official event.