Tech Earnings Week Arrives: US Stock Market Pre-Market - SK Hynix Rises Over 1%, Petrobras Falls Over 20%, Oil Prices Retreat, US Treasury Bonds Strengthen

The earnings season for tech giants has officially begun, and the global market is cautiously observing amid intertwined uncertainties. Nasdaq 100 index futures fell, Asian equities extended their downward momentum, while oil prices retreated from a six-month high, providing some relief to markets.

This week, tech giants such as Microsoft, Alphabet, and Amazon will consecutively release their earnings reports, and the sustainability of their AI infrastructure investments will be put to the market test. Meanwhile, both the Federal Reserve and the Bank of Japan are set to announce interest rate decisions, likely adding volatility to global bond and forex markets. In U.S. pre-market trading, SK Hynix rose over 1% as the company plans a special dividend of $12.1 billion, returning proceeds from the sale of its Kioxia stake to shareholders.

The outcome of the Brazilian election also triggered market volatility. Luiz Inácio Lula da Silva unexpectedly defeated right-wing candidate Flávio Bolsonaro in Sunday’s run-off election, causing a plunge of up to 16% in the Japan-listed Brazil ETF during intraday trading. CME currency derivatives contracts indicated an implied devaluation of over 10% for the real against the U.S. dollar.

Nick Twidale, Chief Market Analyst at AT Global Markets in Sydney, noted in a research report that the market’s focus will "shift from geopolitical headlines that have dominated for weeks back to central bank policy and interest rate trends."

• In U.S. pre-market trading, SK Hynix surged over 1% as the company plans to distribute a $12.1 billion special dividend, rewarding shareholders with proceeds from the sale of its Kioxia stake. U.S.-listed Neocloud stocks broadly fell pre-market: Nebius dropped 4.5%, CoreWeave fell 4.4%, and Iren fell 4.1%.
• Petrobras ADRs in the U.S. pre-market fell over 20%, while Itaú Unibanco dropped over 27%.
• KOSPI in South Korea closed down 1.45% at 5,469.59 points; Nikkei 225 fell 0.8% to 62,189.65 points; Topix Index bucked the trend, closing up 0.2% at 3,972.98 points.
• European stocks opened mixed: Euro Stoxx 50 opened up 0.07%, Germany’s DAX index rose 0.28%, UK’s FTSE 100 lost 0.17%, and France’s CAC 40 gained 0.60%.
• The yield on U.S. 10-year Treasuries edged down 3 basis points to 4.97%, with U.S. Treasuries broadly stronger.
• Japan’s 10-year government bond yield dropped 2 basis points to 2.780%.
• Brent crude pulled back from a six-month high, falling 1.5% to around $114.95 per barrel.
• Spot gold rose 0.3% to $4,008.18 per ounce.
• Bitcoin fell 0.6% to $79,916.76.

The cooling sentiment toward AI-related trades is particularly palpable in the Asian markets. South Korea’s KOSPI closed down 1.45% at 5,469.59 points, with AI concept stocks performing weakly. Goldman Sachs strategists immediately downgraded the KOSPI target price by as much as 25%. Chinese AI model developers also followed suit, with Moonshot’s release of a new model sparking a reassessment of competitive dynamics in the industry.

The Japanese market showed divergence. The Nikkei 225 fell 0.8% to 62,189.65 points, with chip-related stocks being the biggest drag—making it the worst-performing sector on the Nikkei for the week; but the Topix Index managed to close up 0.2% at 3,972.98 points. Overall, the MSCI Asia Index has declined for four consecutive weeks, the longest losing streak since April this year.

Nasdaq 100 index futures fell 0.2%, and its benchmark spot index has posted losses for two straight weeks, while the U.S. Semiconductor Index registered its longest losing streak since November. European equities showed relative independence at open, expected to start around 0.3% higher.

This week’s market agenda is packed. Nick Twidale, Chief Market Analyst at AT Global Markets in Sydney, noted in a research report that the market’s focus will "shift from geopolitical headlines that have dominated in recent weeks back to central bank policy and interest rates."

The policy decisions from the Federal Reserve and the Bank of Japan are in the spotlight, as both face persistent inflation, rising energy costs, and elevated global bond yields. The yield on U.S. 10-year Treasuries edged down 3 basis points to 4.97%, with U.S. Treasuries generally rallying.

Eugene Leow, Senior Rates Strategist at DBS Bank in Singapore, stated, "AI concerns, growth slowdown risks, and political uncertainty from the midterm elections in Europe and the U.S. will keep demand for safe-haven assets high. At current absolute yield levels, U.S. Treasuries should provide strong hedging functionality."

French bond futures outperformed German bond futures, supported by Moody’s affirmation of France's credit rating and the absence of large-scale violent incidents, which lifted market sentiment. Bloomberg strategist Mark Cranfield noted that investors will monitor whether the spread between German and French yields, which has recently widened significantly, can narrow in the near term.

Global oil benchmark Brent retreated from a six-month high, declining 1.5% to around $114.95 per barrel, thereby alleviating some market inflationary pressures.

In an interview with Fox News, Trump asserted that whether to reach a deal with Tehran or "end it" has "reached decision time," using tough language. Meanwhile, Iran is reportedly set to host regional security talks attended by Saudi, Pakistani, and Turkish senior security and defense officials.

Alicia Garcia Herrero, Chief Economist for the Asia Pacific at Natixis, told Bloomberg TV that if the pace of data center construction fails to keep up with surging demand for computing power, the rapid proliferation of AI itself may become an inflationary risk—a risk not yet fully priced in by markets.

The Brazilian market is expected to face heavy selling pressure once trading resumes this week. Lula’s surprise victory caught many investors who had favored right-wing candidates off guard, and Bolsonaro quickly called for the run-off results to be invalidated.

CME’s real currency derivatives showed an exchange rate of about 5.55 per U.S. dollar, implying a drop of over 10% versus last Friday’s close. The Japan-listed ETF tracking Brazilian assets plunged as much as 16% intraday.

Anna Wu, founder and Investment Strategist at Floodlines Research, said, "The market was completely unprepared for this outcome. In my view, this isn’t just an emotional response—the local market now faces the real risks of government debt expansion and currency devaluation."