finance
US, Japan and South Korea Stock Indices Hit Record Highs
Major stock indices in the United States, Japan and South Korea reached new all-time highs this week, even as the war in Iran disrupts global energy markets and shipping routes. Oil prices stand at a four-year high, with 10-12 million barrels a day disrupted in the Strait of Hormuz. Technology sector earnings and AI demand drive the market resilience, while Europe lags behind.
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Stock indices in the United States, Japan and South Korea reached new all-time highs this week. The S&P 500 hit a record high of 7,273 at the start of the week, while the NASDAQ-100 climbed to an all-time high just above 28,000 on Tuesday. In Asia, South Korea’s Kospi soared nearly 7% to a fresh record on Wednesday, and Taiwan’s TAIEX reached a peak of 41,575.
Japan’s Nikkei 225 struck a record high of 60,909 at the end of April.
Semiconductor giants underpinned much of the Asian surge. SK Hynix and Samsung together represent 44% of the South Korean market, while TSMC accounts for 45% of Taiwan’s market, according to Alan McIntosh, Chief Investment Officer at Quilter Cheviot Europe.
These companies supply essential hardware for AI development. S&P 500 companies reported first-quarter earnings growth of 28%, surpassing forecasts of 13%, with the technology sector delivering the biggest positive surprises.
Russ Mould, investment director at AJ Bell, said research shows that the technology sector leads the way, with consensus forecasts pointing to 38% earnings growth this year and 25% in 2027, thanks to AI. Technical factors also propelled the rally. Algorithm-driven trading firms and hedge funds took short positions in mid-March, but a market rebound forced them to cover by buying equities, creating a multi-billion-dollar short squeeze, according to research from Goldman Sachs cited by Mould.
Data center power demand is expected to more than double by 2027, according to a new Goldman Sachs analysis. Big Tech firms have leveraged vast capital reserves to boost AI spending. The United States has been a net energy exporter since 2019, and fuel exports have spiked since the Iran war triggered worldwide shortages.
