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US Pre-Market: Chips Bounce After the Semiconductor Index Falls Into a Bear Market

S&P 500 futures +0.39% and Nasdaq 100 futures +0.85% as Seoul reopens 4.46% lower and Hong Kong rallies 2.36%

Mixed3 min readBy Swingfolio Research

At a glance

S&P 5007,458-1.01%
NASDAQ25,520-1.40%
Dow52,146-0.77%
VIX18.2-3.04%
Russell 20002,962-0.42%
US Dollar100.9+0.15%
US 10Y4.57+0.66%
ES_F7,527+0.39%
NQ_F29,019+0.85%

US Pre-Market: Chips Bounce After the Semiconductor Index Falls Into a Bear Market

Sentiment: mixed S&P 500 futures: +0.39% Nasdaq 100 futures: +0.85%

S&P 500 futures sit 0.39% higher and Nasdaq 100 futures 0.85% higher after the Philadelphia Semiconductor Index closed Friday at 11,673.89, down 20.23% from its 22 June peak of 14,634.72, a fall that began when Chinese startup Moonshot released its open-source Kimi K3 model and investors started marking down what AI capital spending earns back. NFLX.US fell 7.26% on Friday after guiding to slower revenue growth. Crude sits at US$81.75 after Friday's 4.48% jump on US strikes against Iran, which lifted OXY.US 2.26% and CVX.US 1.91% while chips sold.

Overnight drivers

  • Kimi K3: Moonshot's 2.8 trillion parameter open-source model matches frontier US models at a lower build cost, which undercuts the case for current AI capital budgets. SOX lost 9.97% across the week to 11,673.89 and now sits 20.23% under its 22 June peak.
  • KOSPI -4.46% to 6,516.27 in Seoul's first session back after Friday's local holiday, leaving Korea to absorb two days of chip selling at once. The index closed 28.51% below its 22 June peak of 9,114.55.
  • Hang Seng +2.36% to 25,143.05, its highest close since 5 June, on expectations Beijing speeds up bond issuance at the coming Politburo meeting after second-quarter GDP growth of 4.3%.
  • WTI US$81.75 after Friday's 4.48% move to US$82.49 on US strikes against Iran. Brent at US$88.44 has added 6.22% over five sessions.

Overnight Asia and Europe

  • Hang Seng: 25,143.05 (+2.36%)
  • KOSPI: 6,516.27 (-4.46%)
  • Nikkei 225: 64,141.12 (Tokyo shut for Marine Day; last traded Friday at -4.03%)
  • STOXX 600: 642.51 (+0.15%)
  • DAX: 24,882.06 (+0.21%)
  • FTSE 100: 10,570.35 (-0.28%)

Tokyo's closure for Marine Day removed Asia's largest cash market from the session and left Seoul and Hong Kong moving in opposite directions. Korea reopened into two sessions of accumulated chip selling: Samsung Electronics closed 4.31% lower and SK Hynix 4.23% lower. Hong Kong bought Chinese domestic stimulus instead, which explains why the two markets split by nearly 7 percentage points on the same day. Europe followed neither, with STOXX 600 +0.15% and DAX +0.21% against FTSE 100 -0.28%.

Friday's Wall Street close

  • S&P 500: 7,457.69 (-1.01%), down 1.55% for the week
  • Nasdaq Composite: 25,520.24 (-1.40%), down 2.90% for the week
  • Dow: 52,146.42 (-0.77%)
  • Russell 2000: 2,962.22 (-0.42%)
  • VIX: 18.77

AMAT.US fell 5.57% on Friday, the steepest decline among the large chip equipment names, with KLAC.US -3.02% and LRCX.US -2.39% alongside it. TSM.US -2.77%, NVDA.US -2.21% and INTC.US -2.00% fell less than the equipment makers. STX.US +5.66% and WDC.US +2.23% closed higher against that move, separating hard drive storage from the AI accelerator names for a second session.

Pre-market movers

  • MU.US +4.71% leads the memory names, with STX.US +3.77% and WDC.US +3.68% extending Friday's split between storage and logic.
  • AMD.US +3.67%, MRVL.US +3.15%, LRCX.US +3.11% and KLAC.US +2.87% recover part of last week's decline. AMAT.US +2.62% follows its 5.57% Friday fall.
  • BABA.US +3.41% tracks the Hang Seng move, the largest pre-market gain among US-listed China names.
  • NVDA.US +1.60%, TSM.US +2.42% and INTC.US +2.74% retrace a portion of Friday's losses without erasing them.
  • PLTR.US -1.62%, MSFT.US -0.86% and NFLX.US -0.70% trade lower, so the bounce is not reaching every name that fell on Friday.

US economic calendar today (ET)

  • 10:00am: Conference Board Leading Economic Index
  • 10:30am: 3-month and 6-month Treasury bill auctions

What to watch

  • ES=F at 7,526.75 and NQ=F at 29,019.00 put the Nasdaq contract 46 basis points ahead of the S&P contract, after the Nasdaq lost 2.90% last week against the S&P 500's 1.55%.
  • VIX at 18.20 is 3.04% below Friday's 18.77 close and 6.00% above where it sat five sessions ago.
  • US 10-year yield at 4.57% is 3 basis points above Friday and the dollar index at 100.90 has added 0.15%, so neither rates nor the dollar is driving this open.
  • GOOGL.US and TSLA.US both report after the close on Wednesday 22 July, with INTC.US also due this week. The FOMC meets 28 and 29 July.

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Disclaimer

This briefing provides market observations and general information only. It is not personal financial advice and does not take into account your objectives, situation or needs. Past performance is not a reliable indicator of future performance. Consider seeking independent advice before acting on any information presented here.

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