The S&P 500 today continues to benefit from strong performance in mega-cap technology stocks despite ongoing weakness in semiconductors.
S&P 500 Nears All Time High After Strong Tech Rally
S&P 500 finished Wednesday at 7,572. All time high is fewer than 60 points away. Futures edging higher Thursday morning with Dow futures up about 50 points and S&P 500 and Nasdaq 100 futures both up 0.1%.
Not an explosive move. Just quiet momentum continuing in the right direction. Apple, Alphabet, and Amazon each climbed more than 3% Wednesday. Mega cap tech stepping in to carry the market when chip stocks were struggling. Not a perfect rally but enough to keep the indexes moving up.
S&P 500 near all time highs while Asia is in a sustained selloff creates an unusual picture. Same companies. Same AI story. Two completely different market reactions depending on which side of the Pacific you are on.
Soft PPI Report Reduces Fed Rate Hike Concerns
Producer price index came in softer than expected Wednesday. PPI measures what businesses pay before goods reach consumers. Early signal of where consumer prices might go next. Soft PPI following soft CPI on Tuesday is two data points in the same direction.
That combination pushed Treasury yields lower. Bond yields falling is directly good for growth stocks because lower discount rates make future earnings worth more in today’s terms. Tech stocks benefit most from that dynamic. Apple, Alphabet, Amazon all moving higher fits that pattern.
Inflation picture is genuinely improving based on the past two reports. June CPI at 3.5% below the 3.8% forecast. PPI also undershooting. Fed rate hike probability for July is now at 17%. September is still the main focus but even that is getting questioned if data keeps coming in soft.
Bank earnings also helping the mood. Strong results from major banks through Tuesday and Wednesday reinforcing that corporate profits are holding up even in a high rate environment.
Kospi Index Extends Losses as Chip Stocks Fall Again
South Korea’s Kospi dropped 6.4% Thursday morning in Asia. Briefly triggered another trading halt. Second circuit breaker in recent weeks for the same index.
SK Hynix fell 11%. Samsung dropped 8%. Those two stocks together pulling the whole Korean market lower. Same pattern that has been repeating every few sessions now.
Trigger was US trading overnight. SK Hynix ADRs fell 9% in New York. Micron and Intel also dropped. Weakness in US chip stocks carrying over directly to Asian sessions where the same companies trade on local exchanges.
Japan’s Nikkei 225 lost 2.8%. South Korea delivered its first rate hike since 2023 Thursday. Bank of Japan issued another yen intervention warning. Neither event moved markets meaningfully. Collective shrug from traders on both announcements. When geopolitical and valuation concerns are dominating policy headlines get ignored.
Why the S&P 500 and Asian Markets Are Moving in Opposite Directions
US indexes are diversified enough that mega cap tech can offset chip weakness. Apple, Microsoft, Alphabet, Amazon combined make up enormous weight in the S&P 500 and Nasdaq. When those names rally they can carry the indexes even if semiconductor names are selling off.
Korean market does not have that diversification. Samsung and SK Hynix together represent an outsized portion of the Kospi. When both fall double digits in a session there is nothing else large enough to offset it. Index goes down hard.
Also different investor bases reacting to the same information differently. US institutional investors are comfortable holding Apple and Alphabet even during chip selloffs because those companies have diverse revenue streams. Korean market concentration in chip manufacturers means every chip concern hits directly.
What Investors Should Watch Next for the S&P 500
Retail sales and jobless claims land Thursday. UnitedHealth and Netflix report earnings. Each adds to the picture of how the consumer and corporate America are holding up.
S&P 500 within 60 points of its record is close enough that a single good day could push it to new highs. Whether that happens depends on whether Thursday’s data cooperates and whether chip stocks find any stability after another brutal Asian session.
Asia’s pain has not translated into US pain yet this week. Big tech has been doing the heavy lifting. That can continue until it cannot. If Apple or Alphabet or Amazon disappoint on their upcoming earnings reports the buffer disappears and chip weakness would have nothing to hide behind.
For now momentum is pointing up in the US and down in Asia. Two markets. Same technology story. Completely different price action.