Global stock markets largely roared higher this past week, with numerous benchmark indices achieving record highs before experiencing a slight Thursday pullback. Whilst prospects for a U.S.-Iran peace deal generated some volatility, market focus predominantly remained fixed on the relentless artificial intelligence (AI) chip boom. This technological surge continued to propel equities, driving significant gains for key players like U.S. chipmaker AMD and South Korean semiconductor giant SK Hynix. Investment banks are revising spending projections upwards, with Morgan Stanley now expecting top hyperscalers’ capital expenditure growth to exceed $800 billion this year, reflecting strong market confidence in AI infrastructure.
The AI-driven euphoria saw South Korea’s KOSPI index surpass 7,000 for the first time, pushing Samsung’s market capitalisation to $1 trillion. AMD, which designs and develops microprocessors, leapt 15% to an all-time high after forecasting revenue above expectations on robust AI chip demand. SK Hynix, a memory chip supplier, also started the week with a 13% jump. Goldman Sachs anticipates cumulative AI infrastructure spend could reach $7.6 trillion by 2031, fuelling debate on whether markets are entering an AI-fuelled hyper-bull phase or facing dangerous overvaluation.
Concurrently, volatility in the Middle East significantly impacted commodity markets. Early in the week, U.S. President Donald Trump’s “Project Freedom” plan and subsequent Iranian responses, including an attack on a UAE oil port, drove oil prices up by approximately 6%. However, crude prices tumbled mid-week following reports of a fresh U.S. peace proposal, with both Brent and WTI crude briefly dipping below $100 per barrel before renewed fighting saw Brent rise back over this threshold. Elsewhere, the Japanese Yen experienced another volatile week, repeatedly spiking against the U.S. dollar amid suspected government intervention, whilst the dollar remained subdued. Government bond markets also faced pressure, with the U.S. long bond yield briefly touching 5%.
