[Edaily Reporter kyoungeun kim ] While the domestic stock market was closed, stocks and bonds moved in opposite directions. Stock prices showed strength, led by semiconductors, but U.S. Treasury yields continued their volatile trend, surpassing 5%. The securities industry identified Micron’s earnings announcement as the biggest variable this week. Analysts say the tone of the company’s CEO’s remarks will determine the direction of memory semiconductor stock prices.

On the 28th, Cho Jun-ki, an analyst at SKSecurities, stated in a report, “During the domestic stock market’s holiday closure, stocks and bonds moved in opposite directions,” adding, “While stock prices showed strength, particularly in the semiconductor sector, the market remained volatile, with the yield on the 10-year U.S. Treasury note rising to 5.17%.” The 10-year yield briefly climbed to 5.23% during trading last Friday.
Volatility in the bond market also widened significantly. The bond market volatility index (MOVE) surged from around 80 a week ago to 104.6 during the week, closing at 96 on Friday. Analyst Cho assessed the situation, saying, “The war in the Middle East is driving up oil prices, and inflation concerns are fueling expectations of further rate hikes by the Fed, which in turn is pushing up long-term interest rates.”
According to the CME FedWatch tool, the probability of a rate hike at the next meeting in late October stands at 64%. The consensus on the number of additional hikes this year has also shifted from one to two.
The stock market’s rally is concentrated in certain sectors. Researcher Cho explained, “Rather than the entire stock market performing well, the rally is being driven by a concentrated surge centered on certain artificial intelligence (AI) and semiconductor stocks,” adding, “Similar to the markets in South Korea and the U.S., the number of declining stocks is higher than that of rising stocks relative to the index’s rate of increase.” As the KOSPI rose to the 7,080 level, the 20-day Advance-Decline Ratio (ADR) fell to 86%. Typically, a range of 75–80% is considered the bottom range.
Nevertheless, the assessment is that earnings are underpinning the index. Analyst Cho said, “It would be a lie to say interest rates aren’t a burden, but this is a market where the index is moving upward due to the differentiation of certain companies that are maintaining stable earnings despite the interest rate burden.” The 12-month forward price-to-earnings ratio (P/E ratio) for the S&P 500 exceeded 21 times in early May but has since fallen to the low 19 times range. Meanwhile, earnings estimates continue to rise steadily, providing support for the index.
The general consensus is that there was no substantial progress at the U.S.-China summit. The most concrete outcome was a two-month extension—until January 10 of next year—of the trade war truce, which was set to expire in November. No clear agreement was reached on key issues such as tariffs, rare earth metals, Taiwan, and AI. Analyst Cho commented, “The likelihood of the tail risk—a resurgence of the U.S.-China dispute—that the market had feared materializing in the short term has decreased,” but added, “Since the structural competitive landscape persists, this is insufficient to generate new price momentum.”
The most important event this week is Micron’s earnings report, scheduled for early Thursday morning. The market consensus is for revenue of $50.45 billion and earnings per share (EPS) of $31.16. Analyst Cho noted, “The market consensus is already close to the upper end of the guidance the company provided last quarter, so expectations are high,” and predicted, “As always, comments regarding next quarter’s guidance and the sustainability of next year’s memory market boom are likely to be the key drivers, rather than the earnings results themselves.” He added, “Since CEO Sanjay Mehrotra’s tone during conference calls has consistently been very strong, any change in that tone could determine the direction of memory stock prices.”
In the U.S., key economic indicators such as employment data and the Personal Consumption Expenditures (PCE) price index are set to be released. Analyst Cho emphasized, “Now that a benchmark interest rate hike has become a reality, the market is no longer concerned about whether further hikes are necessary, but rather how many more hikes will be implemented,” adding, “We need to keep in mind the possibility that every time the data comes in strong, market sentiment will immediately shift toward expecting tighter monetary policy.”