US-Iran Easing Drives New York Stock Market to Record High... Domestic Market Expected to Open Higher [Good Morning Market]

Oil Prices Plunge Over 5% Amid Signs of Potential Strait of Hormuz Opening

AI Overinvestment Concerns Easing

Limited Impact from AMD's After-Hours Plunge

The New York Stock Exchange reached an all-time high as the United States and Iran entered a phase of eased tensions. The domestic stock market is also expected to open higher, supported by a sharp drop in oil prices and declining interest rates.

On the 4th, the Kospi is displayed on the electronic board in the dealing room of Hana Bank's headquarters in Jung-gu, Seoul. Photo by Yonhap News

On the 4th (local time), the Dow Jones Industrial Average closed at 54,085.88, up 907.47 points (1.71%) from the previous session. The S&P 500 Index ended at 7,736.52, up 136.02 points (1.79%), and the tech-heavy Nasdaq Composite rose 671.10 points (2.59%) to close at 26,584.99. Both the Dow Jones and S&P 500 set new record highs.

Investors were buoyed by optimism that an agreement to open the Strait of Hormuz between the United States and Iran would be reached soon. U.S. Secretary of State Marco Rubio stated on this day, "There has been progress in the negotiations, but a final agreement has not yet been reached," adding, "I hope an agreement can be made very soon." Treasury Secretary Scott Bessent commented, "I believe an agreement could be reached today or tomorrow to open the Strait and bring this dispute into a more normalized phase."

International oil prices also plunged. At the ICE Futures Exchange, October delivery Brent crude futures settled at $79.36 per barrel, down 5.3% from the previous session. On the New York Mercantile Exchange, September delivery West Texas Intermediate (WTI) crude futures closed at $75.77 per barrel, a 5.7% decline from the previous session.

In particular, concerns over excessive investment in artificial intelligence (AI) eased, leading a rally in tech stocks. Palantir recorded a second-quarter earnings surprise, sending its share price up 29.45%. This is the largest increase in more than two years, since February 2024. The surging commercial and government revenue at Palantir—driven by a trend of "data center expansion → cloud growth → increased AI software contracts"—demonstrated that actual AI demand is translating into revenue.

Caterpillar, a construction equipment manufacturer included in the Dow Jones components, rose 5.60% as its earnings outlook was revised upward thanks to soaring AI-focused data center demand. The market highlighted how expanding AI investment is now fueling secondary demand for power, transformers, and construction equipment, in addition to graphics processing units (GPUs) and semiconductors. Given this improvement in earnings season momentum, even if there is temporary volatility, analysts believe that increasing equity allocation remains an effective strategy.

Major semiconductor companies such as Micron (up 7.62%), SanDisk (up 10.97%), Marvell Technology (up 12.81%), and Intel (up 10.84%) also recorded gains. Reports by a Taiwanese IT media outlet forecasting a "sellout of memory chips in 2027" further strengthened the AI growth momentum. SK hynix American Depositary Receipts (ADR) rose 8.17% following reports from Wall Street financial firms recommending boosting their weight in the stock.

Kiwoom Securities analyzed that although AMD reported a quarterly earnings surprise and upward guidance after the market closed, its over 8% tumble in after-hours trading is a cause for concern. However, since this reflects unmet actual market expectations and profit-taking following a sharp recent rebound, the impact on the domestic stock market is expected to be limited.

Jiyoung Han, a researcher at Kiwoom Securities, said, "From a simple excessive decline perspective, a KOSDAQ buying strategy focused on leading sectors such as bio, materials, parts, and equipment is valid, but maintaining a neutral or higher allocation in leading KOSPI stocks such as large-cap semiconductors also remains appropriate."

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