US stocks rose on July 15 (local time) while semiconductor stocks declined, as June Producer Price Index data came in below market expectations. The Dow Jones Industrial Average closed 0.29% higher at 52,658.64, the S&P 500 gained 0.38% to 7,572.40, and the Nasdaq Composite advanced 0.62% to 26,269.23. The Philadelphia Semiconductor Index fell 2.08% to 12,398.89, with SK Hynix ADR dropping 9.00%. The decline in wholesale prices reduced expectations for Federal Reserve interest rate increases, shifting investor flows from semiconductor stocks to large-cap technology stocks. Korean stocks, which surged the previous day, are positioned for consolidation as US semiconductor weakness triggers profit-taking.
US Producer Price Index Falls 0.3% in June
The US Department of Labor reported that the June Producer Price Index fell 0.3% month-over-month. The market had expected flat readings, but the index declined for the first time since August of last year. The decline was the largest since April of last year. The year-over-year increase slowed to 5.5% from 6.0% in May. Energy prices fell 6.4%.
Bloomberg interpreted the PPI data as reflecting the stabilization of energy prices during the US-Iran ceasefire period. According to the CME FedWatch tool, the federal funds futures market priced the probability of a Fed rate increase this month in the low 10% range. The probability of a September increase fell from the mid-50% range to the high 40% range.
BlackRock, the world's largest asset manager, rose 6.6% after reporting second-quarter results that exceeded market expectations. PayPal, reported to have received an acquisition proposal, surged 17.2%. Apple also rose 3.97% as buying flowed into large-cap technology stocks.
Philadelphia Semiconductor Index Drops 2.08% on July 15
The Philadelphia Semiconductor Index fell 2.08% to 12,398.89. Micron Technology plunged 7.94%, while Marvell Technology, Intel, and AMD fell 7.27%, 4.43%, and 3.46% respectively. SK Hynix ADR dropped 9.00% as concerns about data center construction delays emerged.
The MSCI Korea ETF, closely linked to Korean market movements, fell 3.02%.
TSMC Announces Q2 Earnings at 3 PM Korean Time
TSMC will release its second-quarter earnings at 3 PM Korean time. Seo Sang-young, a researcher at Mirae Asset Securities, stated, "Semiconductor volatility is expected to continue. Attention should be paid to TSMC's earnings."
FAQ
Q: What happened to US stocks on July 15?
A: The Dow Jones Industrial Average closed 0.29% higher at 52,658.64, the S&P 500 gained 0.38% to 7,572.40, and the Nasdaq Composite advanced 0.62% to 26,269.23 on July 15 (local time).
Q: Why did semiconductor stocks fall while the broader US market rose?
A: The Philadelphia Semiconductor Index fell 2.08% to 12,398.89 as investor flows shifted from semiconductor stocks to large-cap technology stocks following June PPI data that reduced Federal Reserve rate increase expectations.
Q: How much did SK Hynix ADR decline on July 15?
A: SK Hynix ADR dropped 9.00% as concerns about data center construction delays emerged.
