Asian equity markets advanced on Wednesday, 28 October, as record earnings from South Korean chipmaker SK Hynix reinforced expectations that demand for artificial intelligence infrastructure will continue supporting semiconductor companies. The rally comes as investors prepare for the US Federal Reserve’s interest-rate decision and quarterly results from major technology companies.
The gains reflect renewed confidence in the AI investment cycle, although questions remain over whether technology companies can generate sufficient returns to justify their substantial infrastructure spending.
SK Hynix reports record quarterly earnings
SK Hynix reported third-quarter revenue of 104.62 trillion South Korean won and operating profit of 83.33 trillion won, both records for the company. Operating profit increased by approximately 632% from a year earlier, driven by higher memory prices and demand for AI-related products, including high-bandwidth memory (HBM) chips used in advanced computing systems.
The company also announced plans to return approximately 100 trillion won to shareholders during 2026, including dividends and share repurchases. This includes an additional 60 trillion won in shareholder returns announced alongside its latest results.
The earnings announcement helped lift SK Hynix shares by around 7% to 9% in early trading, while South Korea’s KOSPI climbed more than 5%. Samsung Electronics also advanced approximately 8.5%, supporting the broader semiconductor rally. Market readings varied across reporting times, so these figures represent early-session moves rather than confirmed closing performance.
AI demand supports Asian technology stocks
The gains extended beyond South Korea. Japan’s Nikkei 225 rose around 1.3%, while Taiwan’s Taiex gained approximately 1.8% in early trading. Semiconductor-related shares contributed to the advance as investors responded to the stronger outlook for AI infrastructure demand.
Recent financing announcements involving major AI companies have also helped revive sentiment following concerns about the cost of data centres, borrowing conditions and the sustainability of technology investment.
However, stronger chip demand does not automatically guarantee continued gains across the technology sector. Investors must still assess whether spending on AI infrastructure translates into lasting revenue growth and sustainable profits.
Big Tech earnings provide the next test
Attention now turns to Alphabet and Microsoft, which are scheduled to report quarterly results after the US market closes on Wednesday. Their earnings and management commentary could provide important evidence about demand for AI services, infrastructure spending and expected returns on investment.
Results that demonstrate strong AI-related revenue growth could reinforce confidence in semiconductor suppliers and technology stocks. Conversely, weaker-than-expected growth or concerns about spending efficiency could put pressure on shares that already reflect high growth expectations.
Federal Reserve decision keeps markets cautious
The Federal Reserve is also scheduled to announce its policy decision on Wednesday. Before the announcement, markets widely expected interest rates to remain unchanged, with investors paying particular attention to the central bank’s guidance on inflation and future policy.
Persistent inflation and elevated energy prices complicate the outlook for borrowing costs. A more hawkish message could support the US dollar and Treasury yields while weighing on technology shares and other rate-sensitive assets. A more dovish tone could support equities, although the actual response will depend on how the statement compares with market expectations.
The key issue for traders is whether strong corporate earnings can sustain risk appetite if the Fed signals that interest rates may remain restrictive for longer.
Key Market Impact
| Market or asset | What matters |
|---|---|
| South Korean stocks | SK Hynix’s results and shareholder returns are supporting semiconductor sentiment. |
| US technology stocks | Alphabet and Microsoft earnings will test confidence in AI investment. |
| Nasdaq 100 | Sensitive to Big Tech earnings, AI growth expectations and interest-rate guidance. |
| US dollar | Could react to changes in the Fed’s policy outlook and Treasury yields. |
| Gold | May respond to shifts in the dollar, yields and risk sentiment. |
The market figures above describe the main drivers and potential transmission channels, not guaranteed price movements.
Trader Insight
The current rally has two important drivers: stronger evidence of AI-related earnings growth and expectations surrounding monetary policy.
SK Hynix’s results provide concrete evidence that demand for advanced memory products remains strong. However, the next stage of the rally depends on whether other major technology companies can demonstrate comparable commercial progress.
Traders should avoid treating a broad market rally as proof that every AI-linked stock has the same growth outlook. Earnings surprises, company guidance and valuations can create substantial differences between individual shares.
The Fed decision adds another source of volatility. Even if rates remain unchanged, the statement and press conference could move markets if policymakers signal a different path from the one investors have priced in.
What to Watch Next
- Federal Reserve decision, 28 October: Check the rate announcement and subsequent press conference for clues about future policy.
- Alphabet and Microsoft earnings: Focus on AI-related revenue, capital expenditure and management guidance.
- Samsung Electronics earnings: Scheduled for Thursday, 29 October, these results could provide another signal about semiconductor demand
- Semiconductor price action: Watch whether gains extend beyond SK Hynix and Samsung or narrow after the initial reaction.
- US Treasury yields and the dollar: These may help reveal how markets interpret the Fed’s message.