On July 10th, stock markets across the Asia-Pacific region generally moved higher. South Korea's KOSPI Composite Index at one point surged more than 3%, with both Samsung Electronics Co., Ltd. and SK Hynix Inc. climbing over 4%. Japan's Nikkei 225 Index rose by more than 1,000 points, marking a gain of 1.51%. The broader MSCI Asia Pacific Index increased by 0.6%.
This followed a robust, tech-led rebound on Wall Street the previous day, which reversed a sharp sell-off in chip stocks experienced earlier in the week. Asian markets extended the gains on Friday, with sentiment noticeably improving.
Currently, the KOSPI Composite Index's advance has moderated to 2.6%. The Nikkei 225 Index has seen its intraday gains widen to 2%.
The Key Driver for South Korean Stocks
The surge in South Korean equities was particularly pronounced, with SK Hynix Inc. serving as the most direct catalyst.
According to reports, SK Hynix Inc. has completed a $26.5 billion American Depositary Share (ADR) offering. The funds raised are intended to support the company's expanding capital expenditure plans in the field of AI computing equipment. These ADRs are set to begin trading on the Nasdaq Global Select Market on Friday under the symbol "SKHYV" and will transition to the regular trading symbol "SKHY" on July 13th.
Shares of SK Hynix Inc. in Seoul initially rose before paring gains and turning slightly negative, down 0.1%.
Samsung Electronics Co., Ltd. also rallied more than 4% in sync, though its gains have since narrowed to approximately 2.5%.
Reports indicate that both SK Hynix Inc. and Samsung Electronics Co., Ltd. plan to increase domestic investments in South Korea as part of a government-led, multi-trillion-dollar industrial initiative.
AI Narrative Returns, But Focus Shifts to Profitability
Earlier this week, a sharp decline in chip stocks fueled rising skepticism about the returns on AI investments. However, Thursday's rebound demonstrated that investor confidence in the AI investment boom remains intact.
Anthony Saglimbene of Ameriprise believes the market's direction over the next month will hinge on the earnings season performance. He stated, "Companies can't just beat expectations; they need to demonstrate sustained high profit margins, solid or better-than-expected guidance, and that earnings growth in tech stocks is broad enough to support market valuations."
On the capital expenditure front, Micron Technology, Inc. announced plans to increase its investment in new U.S. plants to $250 billion to meet AI-driven demand growth.
Jeff Buchbinder of LPL Financial noted that AI will continue to be a core market driver in the second half of 2026, but the narrative is evolving. "Investors should focus less on who is spending the most and more on who is generating quantifiable returns from these investments," he suggested.
Bloomberg macro strategist Edward Harrison also cautioned that Thursday's broad-based rally in U.S. stocks requires further confirmation. This validation, he noted, would need to come not only from highly cyclical financial stocks in the upcoming earnings season but also from support for overall profit growth and cooperation on the inflation front.
Geopolitical Tensions Viewed as Manageable
Geopolitically, the exchange of airstrikes between the U.S. and Iran did not trigger market panic.
Brent crude oil edged down 0.2% to $76.10 per barrel, while West Texas Intermediate (WTI) crude fell 0.3% to $71.88 per barrel.
Elias Haddad of Brown Brothers Harriman & Co. pointed out that markets are pricing the strikes as "another manageable escalation," with the underlying assumption that the economy can absorb the shock. U.S. officials also indicated that negotiations would continue despite the recent airstrikes.
Bond Market Developments
In the bond market, a U.S. 30-year Treasury auction recorded its highest yield in nearly two decades. This highlights the pressure on investors to demand higher returns amid an ongoing expansion of bond supply. The yield on the 10-year U.S. Treasury note fell by 3 basis points to 4.55% on Thursday and was largely unchanged on Friday.
In Japan, Finance Minister Katsuya Okada stated that he would not comment on specific bond yield levels, emphasizing that specific monetary policy tools are decided by the Bank of Japan (BOJ). He added that the BOJ can adjust monetary policy independently regardless of government statements, having previously forecast a gradual rise in interest rates, and pledged to ensure fiscal sustainability to maintain market trust. Following these remarks, Japanese government bond yields generally declined: the 10-year yield fell by 4.5 basis points to 2.830%, the 20-year yield dropped 7 basis points to 3.795%, and the 40-year yield decreased 7 basis points to 3.965%.
Other Market Movements
Currency markets were overall quiet. The Bloomberg Dollar Spot Index was largely flat. The euro traded at $1.1434. The Japanese yen strengthened, briefly rising to 162.09 per U.S. dollar. Offshore Chinese yuan traded at 6.7950 per U.S. dollar.
Cryptocurrencies showed slight weakness. Bitcoin declined 0.1% to $63,173.62, while Ethereum fell 0.3% to $1,742.76.
Spot gold prices were essentially unchanged.
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