Key facts
- South Korea's benchmark KOSPI index fell approximately 40% from its late-June peak.
- Samsung Electronics and SK Hynix dropped out of the $1 trillion market capitalization club.
- Asia-focused equity hedge funds are on track for their largest monthly drawdown on record, falling 18.6% through July 28.
- Apple is projected to achieve its strongest June-quarter sales growth in five years.
- Johnson Controls International raised its full-year 2026 profit forecast to $5.05 per share.
- General Dynamics expects 2026 earnings between $16.80 and $16.90 per share.
- Biogen exceeded second-quarter profit and revenue expectations.
- Aon reported a jump in second-quarter profit driven by commercial risk management offerings.
- Banco Santander Brasil's net profit fell 17.6% year-over-year to R$3.01 billion.
- Robinhood Markets reported a second-quarter profit of $573 million, or 62 cents per share.
- Samsung Electronics reported a record operating profit of ₩89.5 trillion for April-June.
- Samsung's semiconductor division profit surged 223 times.
South Korea's benchmark KOSPI index has experienced a significant decline, with major chipmakers Samsung Electronics and SK Hynix falling out of the $1 trillion market capitalization club. This rout, which saw the KOSPI fall approximately 40% from its late-June peak, is attributed to a reassessment of investor expectations regarding artificial intelligence spending. The downturn has impacted Asia-focused equity hedge funds, which are on track for their largest monthly drawdown on record, falling 18.6% through July 28, according to Goldman Sachs. This reversal follows substantial gains from AI hardware bets, with crowded positions now driving steep losses.
Despite the broader market concerns, some companies reported positive financial developments. Apple is projected to achieve its strongest June-quarter sales growth in five years, driven by its decision to maintain iPhone prices. Johnson Controls International raised its full-year profit forecast, anticipating sustained demand for data center-related products and services, and now expects full-year 2026 profit of $5.05 per share, up from $4.85 per share. General Dynamics also lifted its 2026 profit outlook to between $16.80 and $16.90 per share, citing strength in aerospace and shipbuilding, particularly its Gulfstream business jet operations. Biogen exceeded second-quarter profit and revenue expectations due to strong rare-disease drug sales and now forecasts full-year revenue growth, a shift from its previous projection of a decline. Aon reported a jump in second-quarter profit, driven by robust demand for commercial risk management offerings, especially in the construction segment benefiting from data center spending, and reaffirmed its annual revenue growth forecast.
In contrast, Qualcomm forecasts fourth-quarter profit and revenue below Wall Street estimates, citing supply constraints and rising costs. The company expects revenue from Apple products to decline faster than previously anticipated, impacting its share of components for the next iPhone. Banco Santander Brasil reported its weakest quarterly profit since late 2023, with net profit falling 17.6% year-over-year to R$3.01 billion, missing analyst expectations. Robinhood Markets reported a second-quarter profit of $573 million, or 62 cents per share, an increase from $386 million, or 42 cents per share, in the same period last year, attributing the rise to increased trading activity driven by market volatility.
Seoul stocks showed signs of recovery with bargain hunting late Thursday morning, as investors bought large-cap stocks seeking value after recent sharp declines. The benchmark KOSPI traded higher despite ongoing concerns over AI spending and Federal Reserve rate uncertainty. Samsung Electronics reported a record operating profit of ₩89.5 trillion for April-June, up 56% quarter-on-quarter and over 19 times the previous year, with its semiconductor division's profit surging 223 times, driven by AI server demand and high-bandwidth memory chip shipments.