The US equity market was shaped by developments in the supply and demand of funds for AI and semiconductor stocks and by interest-rate movements, while in Japan, movements in AI- and semiconductor-related stocks influenced the Nikkei 225. This article reviews intraday developments from 5 to 7 October and movements in the main contributing stocks.
In the US equity market, the Dow Jones Industrial Average was approximately $90 higher than the previous day on 5 October, supported by softer crude oil prices and an improvement in the ISM Services PMI. Buying was particularly strong in technology stocks, and the Nasdaq hit a new record high for the first time in 4 sessions. On 6 October, buying spread across the NYSE market as long-term yields declined, while increased demand for AI-related stocks provided a cyclical buying catalyst. On 7 October, long-term yields rose again and the Dow Jones entered a decline, with capital goods, materials, financial and consumer-related stocks extending their losses.
In Japan, the Nikkei 225 rebounded sharply on 5 October, rising approximately 2.4% from the previous weekend's close, with a recovery to the ¥70,000 range coming into view. Gains in AI- and semiconductor-related stocks contributed, with stocks such as Advantest renewing their highs for consecutive sessions. On 6 October, the Nikkei 225 continued to rise on gains in US technology stocks, while buying intensified in stocks such as Advantest and TDK. On 7 October, although the market was supported by the rise in US equities, profit-taking emerged in AI- and semiconductor-related stocks, causing the Nikkei 225 to fall and creating a pronounced concentration of index contributions.
Among the contributing stocks, AI- and semiconductor-related stocks made large contributions on days when they ranked among the top 5 contributors, while stocks such as Tokyo Electron and Advantest turned lower during declines, influencing the Nikkei 225. Contributions from AI- and semiconductor-related stocks varied from day to day, with a marked difference in performance: total contributions were approximately ¥973 higher on 10/5, ¥484 higher on 10/6 and ¥23 higher on 10/7.
Regarding crude oil and interest rates, movements in crude oil prices and US yields influenced the market as a whole in early October, while movements in long-term US yields were directly linked to risk appetite in the equity market. These factors shaped the characteristics and movements of AI- and semiconductor-related stocks in the Japanese and US equity markets.