SK Hynix Co. posted profit results that fell short of market expectations even as spending surged to about $31 billion, sending the chipmaker’s shares and broader market sentiment under pressure. The Seoul market tumbled roughly 16% over two trading days, a rout amplified by heavy retail selling, underscoring fragile investor confidence in the semiconductor sector.
The weakness at SK Hynix came amid a flurry of corporate moves from the banking sector that helped temper some of the market’s losses. UBS Group initiated a $3 billion share buyback after reporting results that topped analysts’ forecasts, while Deutsche Bank and Standard Chartered also beat expectations. Standard Chartered’s Asian peer announced a separate $1 billion buyback plan, signaling capital-confidence among lenders even as volatility grips equities.
Geopolitical risks intensified early on reports that the U.S. said Iran had attacked American forces overnight, following U.S. and Saudi strikes on US-backed militias in Iraq. The flare-up in the Middle East helped push Brent crude about 4% higher to roughly $87 a barrel, adding to risk-off flows in some asset classes.
In a separate development with long-term strategic implications, China announced it successfully tested the world’s largest superconducting magnet for its “artificial sun” fusion project, a milestone Beijing framed as progress on the quest for clean, near-limitless energy. The announcement added to a broader narrative of intensifying technological competition among the world’s superpowers.
Corporate cost cutting and labour moves were also in focus. BMW offered severance packages to about 8,000 employees as part of a drive to reduce expenses, a sign that major manufacturers are reshaping their cost bases amid softer demand in key markets.
Policy and markets
All eyes are on the Federal Reserve, which is set to announce its interest-rate decision today. U.S. futures were largely stable in early trading as investors awaited the Fed’s guidance and a busy slate of tech earnings that could set the tone for risk appetite into the summer.
European equities traded about 0.5% lower, reflecting caution ahead of the policy decision, while in Asia markets showed a mixed performance: Hong Kong rallied about 2%, whereas Japan and mainland China posted modest gains. The broader backdrop is one of selective strength — particularly in financials benefiting from buybacks and resilient results — set against persistent macro and geopolitical uncertainty.
What to watch next
- Fed policy statement and any shifts in forward guidance on rates.
- Tech earnings that could influence risk appetite, particularly in the chip and cloud sectors.
- Further corporate capital-return announcements that may support bank stocks.
- Developments in the Middle East and any escalation that could lift oil and weigh on risk assets.
The coming sessions will test whether buyback-fuelled resilience in parts of the financial sector can offset pressure from cyclical chip weakness and renewed geopolitical uncertainty.
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