In U.S. equities, investors are increasingly wary of stretched valuations in AI and semiconductor-related stocks as expectations for rate hikes grow. In Japanese equities, the Prime Market is continuing to shrink amid light trading, while the small-cap Growth Market is becoming more active, according to reports.
In the U.S. market, the Dow Jones Industrial Average closed 105 points higher on 8/27, while the Nasdaq posted a sharp gain. On 8/28, however, selling emerged mainly in semiconductor stocks as long-term interest rates rose. Nvidia's favorable earnings outlook lifted the broader market, but the renewed prospect of a Fed rate hike has heightened awareness of relative valuation levels, pointing to mounting selling pressure on AI and semiconductor-related stocks.
Trading remained light in the Japanese market, while the Growth Market became more active as the Prime Market contracted. The Nikkei 225 ended 8/28 at ¥66,405, up ¥273 from the previous day, with AI and semiconductor-related names among the largest contributors. Reports pointed to a period of significant change in the flow of funds. The TOPIX rose for a seventh consecutive day, and there was speculation that the structure of the market was changing, with trading value on the Prime Market fluctuating along the way.
Developments in the Chinese and other markets were also highlighted as key points, with the report stating that the outlook for Japanese equities should be assessed alongside movements in U.S. interest rates.