U.S. 10-year Treasury yield slips to 5.23%… Wall Street advances as Micron and semiconductor stocks rally
Crude oil climbs 2.71%… Domestic market focuses on foreign supply and demand for large-cap stocks
Key Market Trends
① 10-year yield falls to 5.23%… Growing expectations for an October rate freeze
Despite rising international oil prices, the yield on the U.S. 10-year Treasury note declined to 5.23%.
Bargain-hunting in the bond market—triggered by recent sharp yield spikes—alongside a PCE inflation reading that came in lower than expected, helped stabilize borrowing costs.
Federal Reserve Governor Philip Jefferson noted that more time is needed to assess further policy moves, emphasizing the need to carefully monitor data trends and economic forecasts.
Previously, New York Fed President John Williams stated there is no need to rush additional rate hikes, adding weight to expectations that the central bank will hold rates steady in October.
The U.S. Department of Treasury’s successful completion of a $6 billion debt buyback also contributed to the decline in yields.
② Micron's robust earnings reassessed… Semiconductor shares surge in tandem
Despite initial concerns over gross margins immediately following its earnings release, Micron shares rebounded as strong forward earnings guidance drew renewed attention.
Committed orders from key enterprise clients grew from $22 billion in June to $32 billion, fueling positive sentiment regarding the memory market cycle.
Securities analysts also issued a succession of optimistic outlooks regarding HBM (High Bandwidth Memory) pricing and free cash flow.
Semiconductor-related equities, including Seagate, Arm, and Marvell Technology, rallied together.
SK hynix ADRs advanced 5%.
③ Crude oil rises 2.71%… Middle East unrest persists
International crude oil prices gained 2.71% to $92.87 per barrel.
Reports that Chinese companies suspended jet fuel and gasoline exports, coupled with news of the U.S. deploying an additional aircraft carrier to the Middle East, stoked oil prices.
Uncertainty amplified after former President Donald Trump hinted at a hardline stance regarding the Middle East.
While reports emerged that U.S. and Iranian negotiations have made significant headway, no concrete agreement has been officially confirmed.
Although bond yields retreated, high oil prices and Middle Eastern geopolitical risks remain headwinds for the stock market.
Market Commentary
The domestic stock market rallied significantly on the first trading day of October, smoothly navigating major events including PCE data, Micron's earnings, and September export figures. Inflation metrics alleviated pressures regarding interest rate hikes, while Micron's performance partially eased concerns that the memory cycle is peaking.
Debate surrounding Micron's gross profit margins persists, but the earnings themselves were robust. Notably, the continuous expansion of long-term client commitments is viewed as a factor reducing the likelihood of a sharp memory downturn similar to past cycles.
Attention now turns to foreign investor supply and demand dynamics within the KOSPI market. Throughout September, foreign investors net-sold approximately 20 trillion won, while corporate entities and other buyers net-purchased about 30 trillion won. Share buybacks by giants such as Samsung Electronics and SK hynix effectively absorbed a substantial portion of foreign sell-offs. As these share buyback programs approach completion, whether foreign selling subsides and net-buying resumes will be critical.
Micron's strong earnings could serve as a catalyst to stimulate foreign capital inflows. Conversely, elevated bond yields and rebounding oil prices remain burdens. Investors should focus on the stock-picker's market that has persisted since September while monitoring trends in traditional sector leaders as well as policy- and investment-driven themes.
Today's Checkpoints
Foreign Supply and Demand: Whether foreign investors pivot back to net buyers, centered around Samsung Electronics and SK hynix.
Semiconductor Stocks: How the domestic market prices Micron’s rally and the 5% strength in SK hynix ADRs.
U.S. Treasury Yields: Whether the 10-year yield, which pulled back to 5.23%, will achieve further stabilization.
International Oil Prices: Whether the 2.71% rise in crude and worsening Middle East geopolitics will escalate further.
Key Indicators
Dollar Index: 101.48 (+0.11%)
Crude Oil: $92.87 (+2.71%)
Volatility Index (VIX): 16.39 (+0.31%)
U.S. 10-Year Treasury Yield: 5.23%
MSCI Korea Index: +1.82%
Night Futures: -0.08%
Source: Market Watcher's Stock Story (t.me/shmstory)
YouTube: Market Watcher TV www.youtube.com/@blueoak1004
This article has been reorganized from a Telegram post by Market Watcher's Stock Story with the author's consent. All content is subject to potential errors and does not constitute a recommendation to buy or sell, nor should it be used as a basis for investment decisions. The information herein cannot be used as legal grounds under any circumstances.
