Technology stocks, which tend to face headwinds from higher interest rates, showed resilience as expectations for US rate hikes resurfaced. South Korean and Taiwanese stock indices recovered after a sharp drop on 31 August, while the Nikkei Stock Average ended slightly lower. Expectations for earnings growth are spreading as a view that will support stock prices.
Technology stocks remained relatively stable despite the headwind of higher interest rates as expectations for US rate hikes resurfaced. Market participants point to a mix of views that the period of rising interest rates will be prolonged and that companies' earnings growth outlooks will support stock prices. As a result, sector performance during a rate-hike cycle is drawing attention.
South Korean and Taiwanese stock indices, which are heavily influenced by semiconductor-related stocks, fell sharply on 31 August but recovered after the session. Despite regional downward pressure, market participants overall appear to be focused on signs that the decline may be bottoming out.
In Japan, the Nikkei Stock Average ended slightly lower. The market remained cautious during the session while avoiding a reversal after opening higher, and although concerns about rising interest rates continued to simmer, expectations for corporate earnings growth supported buying.
Overall, many market participants believe that expectations for earnings growth are supporting stock prices despite the renewed expectations for US rate hikes. Investors are watching developments in interest rates alongside the earnings trends of individual companies.