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Chip earnings lift stocks ahead of Fed

A strong earnings report from SK Hynix reinforced confidence in artificial intelligence (AI) demand, sending South Korean shares sharply higher and helping lift Asian equities on Wednesday. Wall Street finished Tuesday mostly higher, led by technology stocks, while European markets generally advanced despite weakness in the UK. Investors await the Federal Reserve’s interest-rate decision and earnings from Google parent Alphabet and software giant Microsoft later on Wednesday, seeking evidence that substantial AI investment is generating sustained revenue growth.

  • Date
  • Author Shane Strowmatt, Senior Investment Writer
  • Reading time 5 minutes

Earnings Season Wrap-Up
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Asian stocks rally on AI optimism

South Korea’s KOSPI jumped more than 6% to a two-week high on Wednesday after memory chipmaker SK Hynix reported a 631% increase in third-quarter operating profit, driven by demand for artificial intelligence applications. SK Hynix shares rose 11%, supported by an additional KRW 60 trillion in planned shareholder distributions, while rival Samsung Electronics gained more than 8%. Japan’s Nikkei 225 advanced 1.5%, China’s Shanghai Composite and mainland China’s CSI 300 each rose 0.7%, and Hong Kong’s Hang Seng gained 0.2%. Meanwhile, the US Dollar Index edged up 0.1% to 102.44, while US Treasury yields rose across the curve, with the ten-year yield just above 5%. Bitcoin gained 1.6% to around USD 80,900.

US tech stocks extend recovery

The Nasdaq 100 rose 1.3% to 29,651.44 points on Tuesday, while the S&P 500 gained 0.6% to 7722.60 points as US technology stocks continued their recovery. The Dow Jones Industrial Average was little changed at 52,377.57 points, held back by aircraft manufacturer Boeing’s 10.7% decline following disappointing comments on deliveries and longer-term cash flow. Optimism about a potential listing of artificial intelligence company Anthropic continued to supporte sentiment, while a rise in consumer confidence provided support on the macroeconomic side. The Conference Board’s US Consumer Confidence Index rose to 91.7 in October from an upwardly revised 84.2 in September, according to data released on Tuesday.

European stocks rise as London lags

The Euro Stoxx 50 gained 0.8% to 6164.65 points on Tuesday, supported by renewed demand for technology shares and lower oil prices amid hopes for diplomacy in the Persian Gulf ahead of Wednesday’s US interest-rate decision. Switzerland’s SMI advanced 0.4% to 14,597.63 points, while UK stocks fell following disappointing corporate results. UK-listed bank HSBC dropped 5.4% after weaker-than-expected net interest income and wealth management performance, while German carmaker Mercedes-Benz lost nearly 4% after lowering its profit target. Swiss pharmaceutical group Novartis rose 1% as easing competition from generic medicines and productivity gains helped adjusted earnings exceed expectations and prompted a more favourable annual profit outlook.

Oil rises on Saudi refinery attack concerns

Brent crude oil futures rose 1.8% to USD 111.36 per barrel, while West Texas Intermediate (WTI) futures also gained 1.8% to USD 101.72 as concerns about Middle Eastern supply disruptions intensified. Iran-backed Houthi militants said on Tuesday they had struck Saudi Arabia’s Ras Tanura refinery with a ballistic missile, increasing fears that the regional conflict could spread. US President Donald Trump said on Tuesday that he would determine when the war with Iran ended and reiterated that any agreement must prevent Tehran from obtaining nuclear weapons, leaving investors uncertain about further military action. An apparent electoral stalemate in Israel added uncertainty over the country’s policy towards Iran, while the risk of disrupted oil shipments continued to support crude prices.

Corporate and economic calendar

Corporate news in focus: Quarterly figures from Alphabet, Hitachi, and Microsoft.

Economic data in focus: German GfK Consumer Climate (08:00), US trade balance (13:30), Bank of Canada interest rate decision (14:45) and Federal Reserve monetary policy decision (19:00).

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Editor: Alessandro Fezzi
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