The domestic stock market is expected to show a mixed performance due to inflation concerns stemming from rising international oil prices and expectations for increased AI investment by major U.S. tech companies. While the New York stock market declined amid weakness in large tech stocks, shares related to AI servers showed strength, drawing attention to domestic semiconductor stocks.
On July 22, the Dow Jones Industrial Average closed down 0.01% at 52,218.58. The S&P 500 index fell 0.14% to 7,498.96, while the Nasdaq Composite dropped 0.57% to 25,690.90.
Geopolitical tensions in the Middle East have led to a surge in international oil prices, putting pressure on investor sentiment. Brent crude rose by 3.36%, and West Texas Intermediate (WTI) increased by 2.95%. As oil prices rise, inflation concerns have intensified, leading to an increase in U.S. Treasury yields ahead of next week's Federal Open Market Committee (FOMC) meeting.
Among individual stocks, AI server manufacturer Supermicro surged over 19%, while Dell Technologies and Hewlett Packard Enterprise (HPE) also saw gains. Nvidia and Broadcom rose by about 2%. In contrast, SK Hynix's American Depositary Receipts (ADRs) fell by 3.88%, and Micron dropped by 1.17%, with major tech companies like Microsoft, Amazon, Meta, and Alphabet also experiencing declines.
After the market closed, Alphabet reported second-quarter revenues of $119.8 billion and operating income of $40.8 billion, exceeding market expectations. Notably, cloud revenue surged 82% year-over-year, driven by increased AI demand. The company also raised its capital expenditure (CAPEX) forecast from $180 billion to $190 billion to a range of $195 billion to $205 billion.
However, concerns about profitability due to expanded AI investments weighed on Alphabet's stock, which showed weakness in after-hours trading.
Seo Sang-young, a researcher at Mirae Asset Securities, noted, "Alphabet emphasized that AI demand is expanding across search, YouTube, and cloud services, but also mentioned short-term profitability pressures." He explained that the negative free cash flow, along with increased capital expenditures and future earnings uncertainty, contributed to the stock's decline in after-hours trading.
Following Alphabet's earnings report, big tech companies like Meta, Amazon, and Microsoft showed weakness in after-hours trading, while semiconductor stocks like Micron rose. This suggests that while AI investment is perceived as a cost burden for big tech, it is seen as a factor that could boost demand for the semiconductor sector.
Domestic semiconductor stocks also showed an upward trend before the regular market opened. According to NextTrade, as of 8:03 a.m. on the day, Samsung Electronics was trading at 266,500 won, up 2.30% from the previous trading day, while SK Hynix rose 2.35% to 1,873,000 won.
On this day, the domestic stock market is expected to be influenced by rising international oil prices and interest rate uncertainties, while the large-scale AI investment by Alphabet may support investor sentiment in semiconductor stocks like Samsung Electronics and SK Hynix.
* This article has been translated by AI.
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