This report reviews developments in the US equity market from 8/24 to 8/26, as well as developments in the Japanese and Chinese markets. The US market fluctuated against the backdrop of inflation and interest rate trends and the impact of Trump policies, while Japanese stocks are expected to be affected by rising interest rates, with the performance of AI- and semiconductor-related stocks likely to determine market direction.
On 8/24, the Dow Jones Industrial Average rose 0.26% from the previous day to $53,417, extending its gains, while semiconductor-related stocks declined. Meanwhile, Treasury yields fell and crude oil futures declined. On 8/25, the Dow rose 0.29% from the previous day for its third consecutive advance. Falling crude oil prices and lower interest rates supported equities, although trading was nervous around Nvidia's earnings. On 8/26, the PCE price index came in above market expectations, pushing up long-term interest rates and leaving selling pressure dominant in equities.
US stocks were affected by remarks from the Trump administration about additional tariffs and uncertainty in the Middle East. Expectations spread that higher oil prices would intensify inflationary pressure and trigger a renewed rise in interest rates. At the same time, market direction continued to be influenced by analyst upgrades and the performance of semiconductor stocks.
In the Chinese market, the Shanghai Composite fell on 8/24 before edging higher on 8/25. The schedule for National People's Congress meetings became a focus for the market, with expectations for measures to stimulate domestic demand coexisting with uncertainty. There were periods when progress in negotiations between the US and Iran and movements in crude oil prices affected dollar-denominated assets.
In the Japanese market, the Nikkei 225 swung sharply on 8/24, 8/25 and 8/26. The outlook for interest rates was key to market direction, and the index rose on 8/26 against the backdrop of gains in US stocks. The contribution of individual AI- and semiconductor-related stocks varied from day to day, and the composition of the top contributing stocks also changed.