Jensen Huang's comments alleviate CoreWeave concerns; growing consensus that CXMT fears were overblown
Declining yields and semiconductor rebound lift KOSPI and KOSDAQ after 8 and 7 sessions, respectively
Key Market Trends
① Jensen Huang says "no support needed": CoreWeave concerns ease
Nvidia CEO Jensen Huang struck an optimistic tone regarding CoreWeave's financial burdens, which had fueled AI investment jitters earlier this week.
He noted that capital costs are actually declining and financial conditions continue to improve steadily, adding that no special support is necessary.
The clarification that support is not needed rather than merely possible helped alleviate market anxiety.
SPI evaluated the remarks as sufficient to ease concerns over neocloud providers.
Deutsche Bank and Bank of America also noted that there are no fundamental headwinds to justify the recent stock sell-off.
CoreWeave bonds, which had slipped to 78 cents, recovered to the low 80-cent range.
② CXMT concerns also subside: Evaluated as prototype level, not commercialization
Concerns surrounding Chinese memory maker CXMT's 4F² technology were also deemed exaggerated.
Most securities firms assessed that the currently disclosed technology is at a prototype stage rather than full-scale commercialization.
The sentiment is growing that fears regarding China's memory catch-up and the sustainability of AI investments—which pressured semiconductor stocks this week—were priced into stocks faster than actual industrial changes warranted.
Samsung Electronics and SK hynix, which spearheaded the sharp decline, rebounded, while autos, pharmaceuticals, semiconductor materials, parts, and equipment (MPE), and brokerage shares also surged.
With an overwhelming number of advancing issues, this reflects a textbook technical rebound following overselling.
③ U.S. Treasury yields drop to 5% range; gains narrow late in the session
U.S. Treasury yields, which had breached 5.3%, fell back into the 5% range, providing relief to the equity market.
The decline in yields was largely attributed to a flight to safety driven by recent market volatility rather than cooling inflation.
Regarding the October FOMC, Kevin Warsh adopted a stance of reserving judgment based on upcoming data rather than pre-judging the outcome.
This was viewed as less hawkish compared to the October rate hike theories recently raised in the market.
Although index gains narrowed late in the session due to an increase in foreign futures selling, there were no distinct changes in U.S. futures or international crude oil prices at the time.
This was interpreted as profit-taking following a sharp short-term rebound rather than new overseas headwinds.
Supply & Demand and Sectors
Foreign selling pressure moderated, with net purchases recorded across most sectors except electrical and electronics.
On the KOSDAQ, foreigners sold electrical & electronics and machinery while net buying pharmaceuticals and general services.
Institutions net sold electrical & electronics, transportation warehousing, and finance, while net buying pharmaceuticals, transport equipment, food & beverage, IT services, and entertainment.
On the KOSDAQ, institutional net buying was observed across most sectors.
Samsung Electronics and SK hynix rebounded, with buying momentum spreading across sectors that experienced recent sharp pullbacks, including autos, pharmaceuticals, semiconductor MPE, and brokerages.
Analyst's Perspective
This week, the stock market plunged as semiconductor-related negative news hit at a rate of roughly two stories a day. Notably, Chinese memory makers took center stage, mirroring the sharp market drop last July.
At that time, the market was shaken by a succession of rumors, including Apple's potential purchase of Chinese semiconductors, China's DUV equipment technology capabilities, Meta leasing out surplus computing power, and reduced memory adoption in Nvidia's upcoming chips. The difference this time is that foreign supply-demand dynamics and news surrounding AI and Chinese memory exerted a greater influence than ETF issues.
Since the beginning of the year, AI-related concerns have resurfaced roughly once a quarter, with market reactions intensifying with each occurrence. This indicates that a massive concentration of investor capital remains tied up in AI and semiconductors. Investors should keep in mind that similar bouts of volatility are likely to recur.
Given the sharp short-term decline, the recovery path may not be entirely smooth. Both markets have already entered oversold territory, and the pullbacks down to July lows were excessive. For the time being, it is necessary to monitor supply-demand volatility and watch for stock-specific rebound movements centered around existing market leaders and large-cap stocks.
Source: Market Analyst's Stock Story t.me/shmstory
YouTube: Market Analyst TV www.youtube.com/@blueoak1004
This article has been reorganized from a Telegram post by Market Analyst's Stock Story with the author's consent. All content may contain errors and does not constitute a recommendation to buy or sell, and thus cannot be used as a basis for investment decisions. The contents of this post may not be used as legal grounds under any circumstances.
