Samsung and SK Hynix Lead Kospi Rally as US Futures Decline

Samsung Electronics and SK Hynix advanced on Tuesday as part of a wider uptick in South Korean stocks, despite futures signaling a softer start for Wall Street after the Labor Day Weekend.

When US markets resume trading on Tuesday following the holiday, they face a more challenging macroeconomic environment. The 10-year Treasury yield last week rose to its highest point since November 2023, while the 2-year note reached a level not seen since January 2025, as investors considered the possibility that stubborn inflation might prompt the Federal Reserve to remain cautious.

Kospi's AI-Led Rally Gathers Pace

The Kospi gained 1.25% to 7,083.84 by late morning local time in Seoul, adding to Monday's surge of over 4% — its biggest one-day rise in months. The move came as investors anticipated that earnings linked to artificial intelligence would continue to exceed forecasts.

Samsung Electronics rose 1.48% to 274,000 won, and SK Hynix increased 3.65% to 1,848,000 won. State-owned Korea Electric Power Co. climbed 3.82%, while oil refiner SK Innovation advanced 1.6%.

Hyundai Motor and LG Energy Solution both declined, while the South Korean won strengthened to 1,338.55 against the US dollar. Japan's Nikkei 225 dropped 0.95%, and the small-cap Kosdaq Index edged up 0.46%. The contrasting moves highlight the uneven impact of AI-related investments across the region.

The recent rally follows a report on chip stocks offsetting Iran tensions and coincides with Goldman Sachs strategist Timothy Moe maintaining a bullish long-term Kospi target, citing a recovery in memory chip earnings.

Oil Gains Add to Wall Street's Caution

Futures for US indexes pointed to a more difficult session. Dow futures declined 308 points, equivalent to a 0.6% drop, while oil reached its highest level in six weeks. The moves follow weekend strikes between Iran and the United States, with Brent crude climbing 1.1% to $97.31 per barrel.

Increasing energy prices are fueling worries about inflation ahead of the wholesale price report on Thursday and the consumer price figures on Friday. Traders are assigning approximately a 60% probability that the Federal Reserve will raise rates by a quarter-point at its meeting next week.

The contrasting market conditions make the chip-driven advance in Seoul one of the rare positive areas. This comes as the week unfolds with a focus on inflation figures and geopolitical tensions in the Middle East.