U.S. stocks open higher in semiconductors on fall in interest rates amid eased U.S.-Iran concerns

05/20 U.S. stocks open higher in semiconductors on fall in interest rates amid eased U.S.-Iran concerns

The U.S. stock market started mixed with buying in the semiconductor industry ahead of the announcement of Nvidia (+1.30%) earnings. In particular, the news that Samsung Electronics’ labor and management reached a deal ahead of the strike eased concerns over memory supply chain instability, which is positive for investor sentiment. Since then, international oil prices and government bond rates have fallen as expectations for U.S.-Iran negotiations have expanded along with the possibility of Pakistan’s arbitration, and the index has shifted upward. U.S. President Trump’s claim that negotiations with Iran are close to the final stage also stimulated the preference for risky assets. However, although volatility has increased during the day, mentioning the possibility of military pressure on Iran, the market has focused more on falling interest rates, maintaining its upward trend, led by semiconductor and financial stocks (Dow +1.31%; Nasdaq +1.54%; S&P 500 +1.08%; Russell 2000 +2.56%; Philadelphia Semiconductor Index +4.49%)

*Variants: Micron Announces, U.S.-Iran Expectations

Samsung Electronics’ labor and management finally reached a deal ahead of the strike. The market expects the agreement to have a positive impact, saying that it has eased related concerns as it could have caused further supply chain instability at a time when memory supply shortages are currently expanding. Micron (+4.76 percent) reiterated at the JPMorgan conference before the market opened the demand for structural memory due to the spread of AI reasoning. In particular, it announced that long-term contracts with strategic customers have improved concerns over earnings volatility.

However, it was mentioned that supply chain instability highlighted the difficulty and cost burden of expanding production capacity. On top of that, it announced that wafer input will more than triple compared to the past, and inefficiency will expand. It was announced that the effect of new expansion is also concentrated after 2027. In general, demand is strong, but supply leading to actual sales has become difficult and complex, and concerns about future performance are also mentioned. Micron also returned its gains in early trading, although it rose more than 5%. Since then, it has risen eventually, noting changes in interest rates on government bonds, but it has been noted that supply chain instability has suggested that earnings growth may not be as fast as expected

Amid this situation, it is estimated that the reason why the U.S. stock market expanded the rise, mainly in the semiconductor industry, was due to the fall in international oil prices and government bond rates due to the easing of U.S.-Iran instability. In early trading, the chairman of Iran’s parliament raised the possibility of an attack by the U.S. military, but the index began to rise in earnest after U.S. media reported that the army chief of Pakistan would visit Iran on Friday to announce the final agreement. In particular, international oil prices plunged 6% on news that negotiations would take place in Pakistan during the Islamic Haj period starting this weekend, and interest rates on government bonds fell by more than 10 basis points on a 10-year basis.

Meanwhile, U.S. President Trump also mentioned that the peace negotiations with Iran have entered the final stage, expanding related expectations. Of course, when President Trump mentioned in his college graduation speech that there would be more battles if Iran did not become wise, the sale was going on. On top of that, a spokesman for Iran’s Foreign Ministry also announced that Pakistan’s interior minister was visiting to mediate on the part of the ongoing exchange of messages with the United States. There were still high expectations and concerns, but the market maintained the index’s rise as interest rates on government bonds fell on the news.

The FOMC minutes show that the Fed members are putting more emphasis on the risk of inflation re-accelerating more widely than expected. In particular, it includes an expression that policy decisions could be two-sided in the future, with some members saying that the possibility of further tightening should be left open if necessary. Of course, the slowdown in the job market is still limited, and the perception that there is no need to cut interest rates immediately is strengthened. Eventually, the minutes maintained a rate freeze on the surface, but internally, the hawkish stance is stronger than expected. However, the interest rate on government bonds has been limited, as the market continues to say that the current level of interest rates has already reflected the Fed’s rate hike.

*Featured Stocks: Philadelphia Semiconductor Index Jumps 4.49%

Semiconductors: Nvidia Expands After-Time Volatility
Nvidia (+1.30%) also fell as the U.S.-Iranian anxiety eased and government bond rates fell sharply ahead of the earnings announcement. This is because hyperscalers have increased their issuance of corporate bonds for capital expenditure, so rising interest rates on government bonds could stimulate financial instability of related companies in the future and affect their capital spending moves. However, as the company has expanded its intra-day volatility following recent options trading, the change is widening ahead of the market close as earnings are set to be announced today. The Philadelphia Semiconductor index is up 4.49%.

Meanwhile, after the market closed, sales in the first quarter surged 85% year-on-year to $81.622 billion, exceeding expectations ($79.2 billion), while data center sales also jumped 92% year-on-year to $75.2 billion ($73.5 billion). The company announced an additional $80 billion worth of share buybacks and raised its dividend from 1 cent to 25 cents per share, while gross profit margin recorded 75%. Revenue in the next quarter also rose to $91 billion, exceeding market expectations ($87 billion). Although it fell more than 2% after the earnings report, it has also shifted upward due to shareholder return policies such as share buybacks. The direction of the conference call seems to be decided

Semiconductors: Intel Rises On News Of Startup Acquisition Negotiations Amid Over-Awareness.
Intel (+7.36%) surged along with a rebound in the semiconductor industry amid the influx of backlash buying following the recent decline. It is interpreted that improved investor sentiment in AI semiconductors due to Nvidia’s performance expectations. In addition, it is also positive that Intel is negotiating to acquire Tenstorrent, a startup that designs AI accelerators. AMD (+8.10 percent) also rose sharply, but Jensen’s recent claim that CPU demand will continue to stimulate positive investor sentiment. Broadcom (+1.63 percent) rose after the JPMorgan conference said that the shift to reasoning continues. Qualcomm (+3.5 percent) also rose.

Semiconductor Storage: JPMorgan Consumer