Wall Street Gains Boost Asian Chip Giants and Markets
Asian stock markets opened higher, driven by strong gains on Wall Street and a sharp drop in U.S. government bond yields following the U.S. Treasury's announcement to double long-term bond buybacks to $4 billion starting September. South Korea's Kospi surged about 6%, led by memory and chip giants SK Hynix and Samsung, which rose over 12% and 8.5% respectively. Japan's Nikkei climbed around 1%, supported by technology and semiconductor stocks like SoftBank and Kioxia. Hong Kong's Hang Seng and China's Shanghai Composite also posted modest gains.
On Wall Street, major indices ended a three-day losing streak with the S&P 500 up 0.4%, Dow Jones 0.3%, and Nasdaq 0.3%. The 30-year U.S. Treasury yield fell sharply by 10 basis points to 5.182%, its largest drop since October 2025, after reaching highs not seen since 2007 earlier in the week. The 10-year yield also declined to 4.63%. The bond rally and a weaker dollar boosted technology stocks, with the Roundhill Magnificent Seven ETF seeing its best day in two months, led by Tesla and Amazon.
However, concerns remain over the economic standoff with Iran, as President Trump threatened severe financial sanctions on countries aiding Tehran and vowed to block all sanction evasion channels. Meanwhile, JPMorgan downgraded European-exposed fintech Klarna to neutral due to weakening economic conditions, and cut its price target. The bank also lowered its rating on internet service provider Cogent amid high leverage and negative cash flow but maintained overweight ratings on telecom infrastructure firms Aray Digital Infrastructure and Telefon and Data Systems, citing potential growth from asset monetization and fiber rollout.
In Israel, dual-listed stocks showed mixed performance with semiconductor and tech shares like Tower Semiconductor and Elbit Systems down, while pharma and biotech stocks such as Opko Health and Teva gained. The overall impact on the Tel Aviv 35 index was neutral. The Federal Reserve's July meeting minutes revealed officials still see a need for further rate hikes if inflation does not ease, delaying market expectations for a December rate increase. Currency strategists warn that fiscal pressures and economic uncertainty could weigh on the U.S. dollar despite recent strength.
The global market mood remains cautiously optimistic amid these developments, with investors closely watching bond yields, geopolitical risks, and corporate earnings for further direction.
