Views have spread that US rate hikes will curb capital investment, prompting observers to point out that movements in the SOX Index could determine the future direction of the Nikkei Stock Average. The analysis is that massive investment supporting AI demand and the Federal Reserve's interest-rate policy will be the turning point in the risk of a full-scale decline.
The US semiconductor stock index SOX has emerged as a key indicator for gauging the direction of the Nikkei Stock Average amid recent market developments. Advantest, Tokyo Electron and SoftBank Group rank among the largest US-listed stocks, and because they account for more than 30% of the overall influence, movements in the SOX Index are considered likely to feed directly into the Japanese market.
The SOX Index's deviation from its 200-day moving average reached a peak in the 70% range in June, showing clear signs of overheating. By the end of July, however, the deviation had fallen sharply and the market temporarily entered a correction phase. Some analysts nevertheless believe that the deviation rate is an indicator of medium- to long-term overheating and does not determine short-term market movements.
Federal Reserve rate hikes and the maintenance of high interest rates could increase the cumulative interest burden and curb capital investment by hyperscale cloud providers that support IT demand. If this leads to a deterioration in earnings, the risk of a full-scale decline in the SOX Index and the Nikkei Stock Average is expected to increase, with attention focused on whether the market will reach a phase resembling the collapse of the IT bubble in 2026.
Annual capital investment by hyperscalers supporting AI demand now exceeds ¥100 trillion, a scale that cannot be covered entirely by profits. It has been pointed out that just over 30% of this investment depends on interest-bearing debt, including corporate bond issuance and private-sector lending.