A rout in chip stocks deepened despite strong earnings from SK Hynix, with the company’s operating profit soaring more than sixfold. However, the results missed analysts’ estimates, fueling investor concerns about the sustainability of AI spending and long-term returns from booming chip demand.
Global Market Trends
Earnings from Big Tech firms, including Microsoft and Meta, will be closely watched this week. The AI trade has shaped global markets, with companies like Alphabet and Tesla reporting negative cash flow, highlighting the tug of war between investing in AI infrastructure and maintaining steady cash flow and profitability.
Oil prices jumped after the US Central Command reported the interception of Iranian ballistic missiles, shattering the sense of calm in markets. Concerns about declining oil supply and inflationary pressure weighed on sentiment ahead of a US Federal Reserve policy decision.
Traders are pricing in a one-out-of-three chance of an interest rate hike, with policymakers increasingly vocal about their worries over inflation. The Fed’s decision will be closely watched, with market participants broadly expecting the central bank to stand pat.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
