After the market closed, Broadcom reported third-quarter earnings that exceeded market expectations, but its fourth-quarter revenue forecast of $34.8 billion—falling short of Wall Street’s expectations of $35 billion—caused its stock to drop by about 4–5% in after-hours trading.
The Trump administration announced that it is preparing new semiconductor tariffs that would link domestic production investments to tariff benefits. South Korea’s foreign exchange reserves increased by $14.3 billion, the largest single-month increase on record. This was driven by semiconductor companies such as SamsungElectronics and SK hynix depositing large amounts of dollar-denominated export proceeds into banks.
Here are the news stories to watch before the market opens on the 3rd.
◇ New York Stock Market Rebounds After 4 Trading Days… NVIDIA Up 3%, Dell Up 15.8%
- On the 2nd (local time), the Dow Jones Industrial Average closed at 53,061.95, up 0.56% from the previous trading day. The S&P 500 index rose 0.46% to 7,666.60, and the Nasdaq Composite index closed up 0.45% at 26,217.83, breaking a three-day losing streak.
- NVIDIA led the rebound with a gain of over 3%. Dell surged 15.8% after raising its annual revenue and profit forecasts. Expectations that AI investments are translating into corporate earnings have resurfaced. Bargain-hunting flowed into recently oversold stocks, including airline stocks, gold and silver mining stocks, regional bank stocks, and semiconductor stocks.
- Angelo Kurkapas, an investment strategist at Edward Jones, commented, “After a difficult start to September, the stock market is finding its footing,” adding that “underlying fundamentals remain constructive.” Market attention has shifted to the U.S. August jobs report, set to be released on the 4th. It is expected to be a key factor in gauging the Fed’s September interest rate decision.
◇Global Government Bond Yields Surge in Unison
- The yield on the 10-year U.S. Treasury note surged to 4.818% during the session—its highest level since November 2023—before paring some of its gains to close at 4.793%. The 30-year yield remained in the 5.27% range.
- Japan’s 10-year government bond yield hit a 30-year high. Germany’s 10-year yield closed at 3.382%, its highest level in 15 years. French government bond yields also surged to their highest levels in several years. This is interpreted as a result of inflation concerns fueling a global sell-off in bonds, driven by a sharp rise in international oil prices following the resumption of military clashes between the U.S. and Iran.
- West Texas Intermediate (WTI) crude rose about 1% to $91.01 per barrel, while Brent crude rose about 1% to $95.63. Brent crude is trading about $20 higher than before the war.
◇Williams: “Energy Prices Not Spilling Over to Services”… Cautious on September Rate Hike
- John Williams, President of the New York Fed, stated in a CNBC interview, “There is evidence that inflation continues to ease as the impact of tariffs weakens, and recent increases in energy prices are not spilling over into other service prices.”
- Krishna Guha, Vice Chairman of Evercore ISI, commented on President Williams’ remarks, saying, “While he did not rule out the possibility of a rate hike in September, his comments challenge the market’s view that a September hike is clearly the prevailing expectation.”
- The Beige Book released today assessed that the U.S. economy grew modestly over the past two months. Demand for data centers drove growth, while employment increased “very slightly.” Companies reported increased uncertainty surrounding high energy prices and international conflicts.
◇Broadcom Down 4% in After-Hours Trading on Q4 Outlook
- After the market closed, Broadcom reported third-quarter fiscal year 2026 revenue of $29.59 billion (up 86% year-over-year). This exceeded expectations ($29.36 billion). Adjusted earnings per share (EPS) came in at $3.32, surpassing the forecast of $3.24. Net income was $13.09 billion, more than tripling from the previous year’s $4.14 billion.
- AI semiconductor revenue surged to $16.7 billion, more than tripling year-over-year. The custom AI chip business with Google, Meta, OpenAI, and others drove this growth.
- The fourth-quarter revenue forecast of $34.8 billion fell short of the consensus estimate of $35.03 billion. Analysts noted that the company failed to meet heightened expectations following NVIDIA’s guidance last week, which significantly exceeded market expectations. The stock fell by about 4–5% in after-hours trading before partially recovering its losses.
◇ Trump: “Iranian attacks won’t last long”… Claims “Trump Strait”
- President Trump stated at the White House that the airstrikes against Iran “won’t last long.” The U.S. and Iran resumed hostilities two weeks after a ceasefire last month. The U.S. military announced the previous day that it had struck the Iranian Revolutionary Guard Corps’ air defense networks, radar systems, maritime assets, mine-laying capabilities, and communications facilities.
- Iran also struck U.S. military bases in the Middle East—including those in Bahrain, Jordan, Kuwait, Iraq, and Qatar—with missiles and drones. The Iranian Revolutionary Guard declared that its “goal is to drive out U.S. troops that have been stationed in the Middle East for decades.”
- President Trump posted on Truth Social, “Now that the Strait of Hormuz is under U.S. control, should we rename it the ‘Trump Strait’?” Regarding the Alaska LNG project, he mentioned, “People from various countries, including South Korea and Japan, are heading to Alaska.”
◇ Trump Administration “Preparing Tariffs on Semiconductors Linked to U.S. Production”
- U.S. Secretary of Commerce Howard Rutnick officially confirmed preparations for a new semiconductor tariff system at the G20 Innovation Ministers’ Meeting, stating, “If you produce in the U.S., you won’t pay tariffs, but if you don’t produce in the U.S., you must be prepared to pay tariffs to enter the world’s best market.”
- Politico reported that the administration is considering a plan to include not only the semiconductors themselves but also finished products—such as data center servers, laptops, and game consoles equipped with semiconductors—in the tariff scope. The Trump administration emphasized that investment commitments for semiconductor production in the U.S. total $1.2 trillion.
- This is expected to have a direct impact on the strategies of domestic semiconductor companies—such as SamsungElectronics(005930)and SK hynix(000660) —to expand their manufacturing and packaging investments in the U.S. Specific tariff rates, the implementation date, and criteria for exemptions for companies investing in the U.S. have not yet been disclosed.
◇ South Korea’s Foreign Exchange Reserves Rise by $14.3 Billion—Largest-Ever Increase… Driven by Surge in Semiconductor Dollar Payments
- According to figures released by the Bank of Korea on the 3rd, foreign exchange reserves as of the end of August stood at $442.28 billion, an increase of $14.33 billion from the previous month. This marks the largest increase since records began and represents the third consecutive month of growth.
- Deposits surged by $7.17 billion to $30.3 billion. A Bank of Korea official explained, “Large amounts of dollar-denominated export proceeds from semiconductor companies such as SamsungElectronics and SK hynix have been deposited in banks, and since the banks have few suitable places to invest these funds, they are depositing amounts exceeding the required reserve ratio with the Bank of Korea.”
- The U.S. Dollar Index fell 1.9% from 99.86 at the end of July to 99.70 at the end of August, contributing to the increase in the dollar-converted value of foreign currency assets denominated in other currencies, such as the euro and the yen. The Bank of Korea has decided to discontinue publishing the international rankings of foreign exchange reserves starting this month.
