US chip stocks back on the rise as SK Hynix comes to America

The artificial intelligence trade was back on Wall Street with chipmakers and semiconductor firms such as Nvidia and Advanced Micro Devices back on the rise as the Nasdaq Composite rallied out of the long Independence Day weekend, with South Korea’s SK Hynix to make its US debut later this week.

Space companies were broadly softer ahead of SpaceX’s addition to Nasdaq 100, which is expected to drive a hive of activity.

A Chinese test missile launch in the Pacific attracted a rebuke from New Zealand’s foreign minister Winston Peters among others as security remains high on the global agenda, while on the other side of the world, Ukrainian President Volodymyr Zelenskyy said he will urge leaders at the Nato summit this week to boost their support to help his nation end its war with Russia.

And New Zealand’s Commerce Commission is stepping up its investigations into supermarket rebates for suppliers, which it sees as holding back competition in the grocery sector.

Tech time

Stocks on Wall Street started the week stronger, with the AI trade fuelling a 1.2% gain for the Nasdaq in late trading, with the likes of Nvidia, AMD and Qualcomm among the day’s leaders. The S&P 500 rose 0.8%, while the Dow Jones Industrial Average was up a more modest 0.2%, led by International Business Machines, Boeing and Goldman Sachs.

The US$29 billion initial public offering for South Korea’s SK Hynix attracted attention, with the semiconductor firm due to start trading on the Nasdaq on Friday. Samsung Electronics’ quarterly earnings on Tuesday are expected to provide the next lead for the sector.

“The rebound in technology follows last week's sharp profit-taking in semiconductor stocks,” Moomoo market strategy consultant Greg Boland said in a note. “Last week's move out of expensive AI stocks now appears to have evolved into a more balanced rally, with technology once again participating alongside financials, industrials and healthcare rather than carrying the market alone.”

Microsoft declined after announcing plans to shrink its Xbox unit by a fifth as it restructures its gaming division, laying off 3,200 people.

Meanwhile, SpaceX fell 3.8% ahead of its Tuesday addition to the Nasdaq 100 index, with space companies including AST SpaceMobile and local favourite Rocket Lab also weaker.

Crypto treasury firm Strategy nudged higher after selling US$216 million of Bitcoin last week. Bitcoin was up 1.6% at US$63,737 at 7am in Auckland.

Defence focus

Lockheed Martin dipped after agreeing to buy naval defence firm Ultra Maritime for US$3.45 billion, in a broadly stronger day for defence companies on both sides of the Atlantic.

European stock markets were mixed, with the UK’s FTSE 100 and France’s CAC 40 both down 0.3%, while Germany’s DAX advanced 0.2%, with ammunition maker Rheinmetall leading the bourse higher.

Ukrainian President Zelenskyy will seek greater support from Nato leaders at their summit this week to help him end the war with Russia, telling the Financial Times that his nation’s air defences were a major vulnerability.

Meanwhile, New Zealand, Australia and Japan criticised China for test-firing a missile in the Pacific Ocean from a nuclear-powered submarine, with NZ foreign minister Peters calling it an “unwelcome and concerning development”.

Wall Street’s rally and a 1.2% lift in gold futures to US$4,176 an ounce weren’t flowing through to the antipodes, with Australian futures pointing to a 0.1% decline for the resources-heavy S&P/ASX 200 index when trading opens across the Tasman.

The kiwi dollar traded at 57.04 US cents at 7am from 56.89 cents yesterday and was little changed at 81.98 Australian cents from 82.07 cents.

New Zealand’s Commerce Commission said it’s prioritising investigations into supermarket supplier rebates after a probe found wholesale pricing competition was weak, but stopped short of recommending regulation.

Meanwhile, a new local IPO candidate emerged, with the National Business Review reporting that Sudima hotel operator Hind Management was eyeing a listing in the next five years to support its expansion across Asia.

No major local data are scheduled for today.

Reporting by Paul McBeth. Image from Philipp Katzenberger on Unsplash.