[New York Stock Exchange] Indexes Climb on Semiconductor Rally... Amazon Up 6% After Hours

Semiconductor Stocks Surge...
SK hynix ADR Up 17%

Amazon AWS Revenue Grows 37% Year-on-Year

On July 30 (local time), all three major New York stock indexes closed higher, driven by gains in technology and semiconductor stocks. Microsoft surged on the back of better-than-expected earnings announced the previous day, while semiconductor stocks such as Micron, AMD, and SK hynix American Depositary Receipts (ADR) also climbed, pulling the indexes up. After the market closed, Amazon reported cloud earnings that exceeded market expectations, causing its stock to jump about 6% in after-hours trading.

At the New York Stock Exchange (NYSE), the Dow Jones Industrial Average (Dow) closed at 52,208.06, up 613.92 points (1.19%) from the previous trading day. The S&P 500 index, which focuses on large-cap stocks, rose by 121.48 points (1.66%) to 7,437.63. The technology-heavy Nasdaq index ended at 25,122.17, up 679.23 points (2.78%).

Inside the New York Stock Exchange. New York, USA – Photo by Yoonjoo Hwang

The strength in semiconductor stocks stood out on the day. Micron soared by 18.36%, AMD by 13.00%, SK hynix ADR by 17.52%, and Intel by 11.30%, all closing sharply higher. Microsoft, after confirming strong growth in its cloud business from the previous day's earnings report, jumped 15.51% to close at USD 451.10. In contrast, Meta plunged 7.95% following guidance for weak sales and the announcement of a 91% drop in its second-quarter free cash flow.

Steven Evans, Chief Investment Officer at Pave Finance, commented, "Ultimately, this is a story of two AI investment strategies," noting, "One company is increasing profits despite heavy spending, while the other is allowing those costs to eat into its bottom line."

The cloud computing revenue from Amazon, which drew significant market attention, exceeded expectations. On July 30 (local time), Amazon announced that its second-quarter AWS revenue reached USD 42.2 billion, up 37% from a year earlier. This marks the fastest growth rate since the fourth quarter of 2021, also surpassing the USD 40.6 billion projected by experts surveyed by Bloomberg.

AWS accounts for about one-fifth of Amazon's total revenue, but it is the core business that earns the majority of its operating profit. After closing at USD 235.50 on the New York market, Amazon's share price rose by about 6% in after-hours trading.

Samir Samana, Senior Global Market Strategist at Wells Fargo Investment Institute, analyzed, "Despite short-term volatility, the outlook for the U.S. stock market remains positive, thanks to solid corporate earnings, continued adoption of AI, a resilient economy, and favorable financial conditions."

Keith Lerner of Truist Advisory Services commented that the recent weakness in the stock market appears more in line with a recalibration of an overheated market than the collapse of a major trend, stating, "The bull market remains intact."

Although U.S. economic growth slowed in the second quarter, private demand, led by consumer spending and business investment, remained strong.

The U.S. Department of Commerce announced that the U.S. gross domestic product (GDP) growth rate for the second quarter of this year was an annualized 1.5% quarter-on-quarter. This was slower than the first quarter's growth rate of 2.1% and below the 1.8% forecast by Dow Jones-polled experts.

Although the growth rate fell short of expectations, robust consumption and business investment were observed. This maintained caution about prolonged high interest rates, resulting in higher U.S. Treasury yields.

According to Investing.com, the 30-year U.S. Treasury yield rose 7.2 basis points (1bp = 0.01 percentage point) from the previous session to 5.215%. The 10-year U.S. Treasury yield increased by 5.1 basis points to 4.673%, while the two-year Treasury yield edged up by 1.2 basis points to 4.248%.

International oil prices fell as talks were held, led by Saudi Arabia, to form a multinational coalition to guarantee freedom of navigation in the Red Sea. On the New York Mercantile Exchange, West Texas Intermediate (WTI) for September delivery dropped 1.0% from the previous session to USD 83.59 per barrel. September Brent crude oil futures on the ICE Futures Exchange fell by 1.4% to USD 86.88 per barrel.

Some point out that, separate from the growth outlook for AI, defensive investment strategies are also necessary. Ulrike Hoffmann-Burchardi, Chief Investment Officer at UBS, commented, "While we have a positive view on the growth outlook for AI, investors should broaden their scope to defensive stocks within technology to manage the risk of concentration."

This content was produced with the assistance of AI translation services.