Chip Giants Surge as Samsung Predicts Record Profits

Samsung Electronics projected a record operating profit of 107.4 trillion won for the final quarter, a figure that represents nearly an eight-fold increase from the same period last year. The South Korean giant released this estimate on Tuesday, positioning itself for a major earnings report scheduled for Wednesday. This forecast signals intense global demand for semiconductor technology and has driven significant growth in the local economy. South Korean data released the same day showed the country expanded at a 3.4% annual rate in the July-September period, outpacing previous expectations.

South Korea’s Kospi index jumped more than 4% during trading hours before closing 3.1% higher at 5,638.34. Computer chipmaker SK Hynix led the rally with a 5.2% gain, while Samsung Electronics climbed 4.2%. SK Hynix is set to release its third-quarter results on Wednesday, one day before its rival Samsung reports its figures. The performance reflects a strong recovery for the sector, which has faced volatility due to high borrowing costs for data center construction and chip purchases.

In Tokyo, the Nikkei 225 added 1.7% to close at 63,268.37. Testing equipment maker Advantest saw its stock jump 9.6%, and SoftBank Group, an investor in OpenAI, climbed 5%. These gains followed a broader rally in artificial intelligence stocks on Wall Street. In Australia, the S&P/ASX 200 advanced 0.5% to 8,852.10. However, gains in China were less pronounced. Hong Kong’s Hang Seng index gave up early progress to slip 0.6% to 23,077.56, while the Shanghai Composite dropped 0.3% to 3,648.30. Traders in the region watched for announcements from a closed-door meeting of top leaders in China's ruling Communist Party.

U.S. futures edged lower after earlier gains as investors awaited major corporate earnings and central-bank decisions. On Monday, the S&P 500 rose 0.7%, recovering most of its previous week’s losses and moving within 1.8% of its all-time high. The Dow Jones Industrial Average added 0.3%, and the Nasdaq composite climbed 0.8%. Nvidia provided the strongest lift for the market, rising 2.4% and recovering some ground after three consecutive weeks of declines. This was the longest losing streak for the company since June.

Meta Platforms experienced price fluctuations after outlining plans to raise $35 billion by selling stock to fund AI investments. The company stated that Nvidia, Advanced Micro Devices, and Broadcom have indicated they may purchase a total of $5 billion of stock in the offering. Anthropic, a key player in the AI boom, released details on Monday about its current losses as it prepares for a public stock offering. SpaceX, which also runs the xAI business, saw similar volatility after announcing a deal worth approximately $40 billion with an entity managed by Apollo Global Management to lease AI computing power.

Profit reports from major technology companies are expected to provide clarity on AI spending and productivity. Alphabet and Microsoft will report their latest quarterly results on Wednesday, with Amazon following on Thursday. Roughly one-third of stocks in the S&P 500 are scheduled to report earnings this week. In the bond market, yields on longer-term Treasurys fell. The 10-year Treasury yield eased to 4.98% from 5.00% late Friday, while the two-year yield rose to 4.71% from 4.69%. The widespread expectation is that the Federal Reserve will conclude its meeting Wednesday without changing the federal funds rate, after hiking it last month to address persistent inflation.

Oil prices extended their losses on Tuesday. Brent crude, the international standard, fell 0.5% to $110.21 a barrel. U.S. benchmark crude dropped 1.1% to $100.66 per barrel. Currency markets showed mixed results, with the dollar rising to 157.79 Japanese yen from 157.50. The euro slipped to $1.1157 from $1.1176.