Global Stocks Rise as Chip Rebound Gathers Speed: Markets Wrap
(Bloomberg) — A rebound in global chipmakers carried into Friday, buoying stocks to end a month that saw a steep derating in this year’s most popular trade on a positive note. Amazon.com Inc. jumped 12% after strong earnings.
An unprecedented 18% surge in South Korea’s Kospi Index led the charge after memory giant SK Hynix Inc. hit the 30% daily limit. An exchange-traded fund tracking chip stocks gained 4% in early US trading. Europe’s Stoxx 600 headed for a record high. Nasdaq 100 futures climbed 1.2%, while those for the S&P 500 rose 0.5%.
The recovery is offering investors a reprieve after worries over valuations and whether the vast sums being poured into artificial intelligence will pay off sent a key gauge of chipmakers down more than 20% this month. Those concerns eased after robust earnings and spending plans by Amazon.com and Microsoft Corp. offered evidence that demand for components powering AI remains strong.
“The worst of the positioning washout is probably behind us,” said Florian Ielpo at Lombard Odier Investment Managers. “On valuations, I would say they are more reasonable than a month ago, not cheap. So this is not the end of the AI trade, it is probably the end of its easy phase.”
Treasuries rose across the curve as oil prices extended their declines. The biggest moves came at the longer end, with the 30-year yield falling three basis points to 5.18%.
After the 30-year yield touched multiyear highs following the Federal Reserve’s decision to hold rates steady despite still-elevated inflation, scrutiny of the central bank is likely to remain high in the months ahead.
“While the messaging on inflation has been firm, investors are still trying to assess how that commitment will translate into policy decisions,” said Francisco Simon at Santander Asset Management. “The combination of a credible inflation objective, but less visibility on the path of policy decisions, could translate into higher volatility in rates markets.”
The yen gave back some of Thursday’s intervention-driven gains against the dollar. The Bank of Japan held its policy rate steady hours after officials took the rare step of wading back into the currency market. The dollar rose 0.2% to snap a five-day run of losses.
Corporate Highlights:
Universal Music Group NV’s shares plummeted the most since July 2024, after the company’s subscription revenue growth fell short of expectations in the second quarter. Apple Inc. tumbled in late trading after component shortages weighed on the company’s sales forecast, signaling that industrywide supply constraints are taking a bigger toll than anticipated. BP Plc said it’s starting a process to market its North Sea business for a potential sale, as part of a wider review of the oil major’s portfolio. NatWest Group Plc raised its guidance for the year and said it will consider buybacks sooner than planned after beating earnings estimates in the second quarter. Credit Agricole SA reported better-than-expected results for the second quarter, as income rose at its French retail business and its asset management arm reported a record profit. Tesla Inc. is weighing a potential separation of its China business to pave the way for a possible merger with SpaceX, the Wall Street Journal reported. Some of the main moves in markets:
Stocks
The Stoxx Europe 600 rose 0.8% as of 9:37 a.m. London time S&P 500 futures rose 0.5% Nasdaq 100 futures rose 1.2% Futures on the Dow Jones Industrial Average rose 0.6% The MSCI Asia Pacific Index rose 4.8% The MSCI Emerging Markets Index rose 6.5% Currencies
The Bloomberg Dollar Spot Index rose 0.2% The euro fell 0.2% to $1.1507 The Japanese yen fell 0.4% to 160.17 per dollar The offshore yuan was little changed at 6.7461 per dollar The British pound fell 0.2% to $1.3440 Cryptocurrencies
Bitcoin fell 1.3% to $63,852.9 Ether fell 1.6% to $1,890.13 Bonds
The yield on 10-year Treasuries declined two basis points to 4.65% Germany’s 10-year yield was little changed at 3.15% Britain’s 10-year yield declined one basis point to 4.97% Commodities
Brent crude fell 1.3% to $87.88 a barrel Spot gold fell 1.1% to $4,060.11 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Macarena Muñoz, Neil Campling and Anand Krishnamoorthy.
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