US stocks, led by SOX, are showing pronounced signs of forming a head-and-shoulders top and moving into a declining phase. Meanwhile, reports suggest that Japanese stocks are shifting away from a phase in which AI and semiconductor stocks held the position of market leaders.
In the US market, the SOX index, which reflects the performance of AI and semiconductor-related stocks, has formed a head-and-shoulders top, and reports indicate that its downward trend is likely to continue into the latter half of August. In the latest market movements, developments in the Nasdaq and long-term interest rates, in addition to SOX, are affecting the equity market as a whole.
In the Chinese market, the Shanghai Composite rebounded in early August but was limited to a modest rebound on 21 August. Developments related to the National People's Congress and interest-rate levels are seen as sources of market concern, while resource and technology stocks have moved in mixed directions.
In the Japanese market, the Nikkei Average rose by more than ¥890 on 20 August, while some major stocks declined on 21 August. The contribution of AI and semiconductor-related stocks has been trending lower, prompting reports that their influence over the market is beginning to change.
Some observers say investors need to closely monitor global interest-rate trends, the expansion of the US fiscal deficit, and developments in US-China tensions. Attention is also focused on the relevance of individual themes, including news of Mitsubishi Electric's acquisition of a US company and developments in China's policy on critical minerals.