US Stocks Early Session: Semiconductor Stocks Surge to Counter Oil Price Impact! Major Indices Mixed

Major US stock indices saw mixed performance on Tuesday (8th). Rising oil prices due to escalating Middle East tensions, coupled with US-Canada trade tensions, have raised concerns that rising energy costs could exacerbate inflation and force the Federal Reserve (Fed) to raise interest rates. The Dow Jones Industrial Average briefly fell by about 500 points.

However, semiconductor stocks have been strong for the fourth consecutive trading day. Qualcomm (QCOM-US) and Amazon (AMZN-US) signed a multi-generation data center chip cooperation agreement, surging 5.5%, while Intel (INTC-US) also rose 6%, offsetting some of the risk sentiment. Investors are waiting for the key inflation data to be released later this week.

As of the deadline, the Dow Jones Industrial Average fell nearly 460 points or nearly 0.9%, the Nasdaq Composite Index fell nearly 50 points or nearly 0.2%, the S&P 500 Index fell nearly 0.2%, and the Philadelphia Semiconductor Index rose nearly 1.9%. TSMC ADR rose nearly 2.2%.

International oil prices are nearing $100 per barrel, reigniting market concerns about rising inflation and further tightening by global central banks. S&P 500 futures fell 0.2% in the premarket on the first trading day after the holiday, with Asian stocks also weakening. The European Stoxx 600 index remained largely unchanged.

Saudi Arabia stated that its southern oil facilities have been attacked and temporarily shut down, coupled with strong Chinese demand, further exacerbating the tight supply in the oil market. Brent crude oil briefly surpassed $98 per barrel, gradually approaching the $100 mark, also strengthening market expectations that various countries' central banks will need to curb inflation through rate hikes.

The market is also concerned about further instability in the Middle East. The focus this week will shift to the US Consumer Price Index (CPI) to be released on Friday (11th), which could be a key factor in the Fed's decision to raise rates or hold steady this month. In contrast, the market has largely priced in the possibility of rate hikes by the European Central Bank (ECB) and the Bank of Japan (BOJ) in September.

Partners Group strategist Anastasia Amoroso said that global central bank policies are undergoing a significant adjustment, and the market may be entering a digestion phase, with some of the previous gains possibly being given back, at least in the short term, possibly maintaining a range-bound market.

In the forex market, the US dollar index showed little change. Supported by expectations that the BOJ may adopt a more tightening policy, the yen briefly rose above the 153 yen mark against the dollar, before partially retracing some of its gains.

US Treasury prices remained largely unchanged as investors awaited the Treasury Department's sale of $58 billion in 3-year notes, followed by the sale of 10-year and 30-year notes later this week. With long-term US bond yields hovering near multi-year highs, the market will closely watch demand performance. The borrowing cost of the UK's latest bond sale rose to the highest level since at least 1998.

Jefferies International strategist Mohit Kumar noted that bond market positions are quite extreme, and yields may fall in the short term. Friday's inflation data or next week's Fed decision could be a turning point. If CPI is as mild as the firm expects, a short-covering rally could be expected to drive the bond market higher, and falling rates would also support risk assets such as stocks.

In addition to oil prices, copper prices set a new historical high for the second consecutive trading day, adding to commodity-driven inflation pressures. Recent supply constraints, coupled with market expectations that the US may impose additional tariffs on refined copper imports, have jointly pushed up copper prices.

In individual stocks, semiconductor stocks performed relatively well in the premarket. HSBC (HSBC-US) strategist Willem Sells believes that US stock valuations have not yet fully reflected the productivity and earnings growth brought by AI, especially investors' doubts about whether semiconductor companies can achieve their 2027 earnings forecasts. Morningstar Wealth investment manager Mark Preskett noted that many large AI companies have strong earnings reports, but market reactions have been relatively subdued except for NVIDIA (NVDA-US).

As of Tuesday (8th) around 21:00 Taipei time:

Dow Jones Industrial Average fell 443.59 points or 0.83%, provisionally reported at 52,970.66 points Nasdaq Composite Index fell 7.28 points or 0.03%, provisionally reported at 26,499.71 points S&P 500 Index fell 11.45 points or 0.15%, provisionally reported at 7,707.15 points Philadelphia Semiconductor Index rose 217.13 points or 1.85%, provisionally reported at 11,952.39 points TSMC ADR rose 3.25% to $442.45 per share 10-year US Treasury yield fell to 4.76% New York light crude oil rose 1.61% to $92.95 per barrel Brent crude oil rose 1.56% to $97.78 per barrel Gold fell 0.60% to $4,449.60 per troy ounce Dollar index fell to 98.82

Focused individual stocks:

Lockheed Martin (LMT-US) early session stock price rose 1.93% to $535.40 per share Lockheed Martin premarket rose 0.7%. UBS (UBS-US) upgraded this defense contractor's investment rating from 'neutral' to 'buy', citing that the market has not yet fully reflected its earnings growth potential.

Peloton (PTON-US) early session stock price fell 4.45% to $5.16 per share Fitness equipment maker Peloton premarket fell over 4%. Morgan Stanley (MS-US) downgraded its investment rating from 'neutral' to 'underweight', noting that Peloton is facing structural headwinds in the fitness industry.

D-Wave Quantum (QBTS-US) early session stock price rose 8.96% to $18.07 per share Quantum computing concept stocks premarket showed strength. The US government announced that it will acquire minority stakes in multiple quantum computing companies under a $3 billion 'Chip Act' agreement. D-Wave Quantum rose over 5%, Rigetti Computing (RGTI) surged nearly 14%, and Quantinuum (QNT) also rose 4%.

Today's key economic data:

None

Wall Street analysis:

As inflation risks rise, strong earnings prospects for US companies are supporting the stock market. A Citigroup index shows that earnings expectations for US companies have been upgraded more than downgraded for the 21st consecutive week, the longest such streak since September 2021.