Apple Market Cap Surpasses $5 Trillion, Becomes Second Company in History; Semiconductor Stocks Plummet, Japanese Stocks Soften Due to Kumamoto Earthquake; Markets Nervous Awaiting FOMC Results | 2026.7.29
Mixed fortunes in AI-related stock picking, geopolitical risks and monetary policy also intertwine
Apple's market capitalization briefly surpassed $5 trillion during trading on the 28th, making it the second company in history to reach this milestone after NVIDIA. As semiconductor stocks plummeted due to concerns over massive investments in artificial intelligence (AI), Apple's stock price has been re-evaluated, having kept a distance from the AI investment race. Meanwhile, there are regional differences in the flow of AI-related funds, such as Chinese semiconductor memory giant CXMT soaring 466% on its first day of listing on the Shanghai market, jumping to the top of the Chinese stock market in terms of market capitalization. On the 28th, an earthquake with a maximum seismic intensity of 7 occurred in Kumamoto Prefecture, raising concerns about the impact on the high-tech industry supply chain. The results of the U.S. Federal Open Market Committee (FOMC) are scheduled to be announced on the 29th, and with the market also closely watching the direction of monetary policy, a nervous development with multiple factors intertwining is expected to continue throughout the week.
Apple surpasses $5 trillion market cap, a historic second achievement
In the U.S. stock market on the 28th, Apple shares rose nearly 1% to reach $340.08. During trading, it hit a high of $342.89, and its market capitalization reached $5 trillion for the first time. Surpassing the $5 trillion market cap mark makes it the second company in history to do so, following U.S. semiconductor giant NVIDIA.
Ross Mayfield, an investment strategy analyst at Baird, pointed to valuation as a factor behind the inflow of funds into non-tech stocks, stating, "Gross Domestic Product (GDP) is solid, and the labor market is also moving steadily. There is evidence that personal consumption is re-accelerating in many regions." On this day, Coca-Cola rose 5% after raising its full-year sales and profit outlook, while Boeing rose 4.8% as investors welcomed the shift to positive free cash flow following progress in its management restructuring plan. While specialty glass manufacturer Corning plunged 12% after its third-quarter sales outlook fell short of market expectations, health and medical data company IQVIA Holdings rose 14% after raising its full-year profit outlook, showing mixed results for individual stocks.
Semiconductor stocks plummet, SOX down 25% from highs
Semiconductor stocks, which have benefited from massive AI-related investments, saw further selling on top of recent declines. The Philadelphia Semiconductor Index (SOX) fell 4.5% on the 28th, down about 25% from its all-time closing high set on June 22. However, it still maintains a 56% gain year-to-date. Individually, memory giant Micron fell 8.8%, AMD fell 8%, and semiconductor manufacturing equipment giant Applied Materials also fell more than 8%, indicating a rapid correction across the entire sector.
Amidst this, while the Dow Jones Industrial Average and the S&P 500 continued to rise in the U.S. market, the Nasdaq Composite Index fell slightly, showing mixed results among indices. By major S&P 500 sector, healthcare rose over 2%, consumer staples also rose about 2%, and materials rose 1.7%, while information technology fell over 1% due to the decline in semiconductor stocks. In the S&P 500 as a whole, the number of advancing stocks outnumbered declining stocks by a ratio of 2.5 to 1, suggesting that funds were directed toward a wide range of stocks excluding semiconductors. The combined trading volume on U.S. exchanges was 17.2 billion shares, almost the same level as the 17.4 billion share average of the last 20 trading days.
CDS also records largest rise amid NVIDIA's massive loan guarantees
Regarding NVIDIA, it is reported that the company is in negotiations to provide loan guarantees of up to $250 billion for a data center construction project with a total project cost of approximately $500 billion, led by conversational AI company OpenAI. Prior to this, NVIDIA also announced a comprehensive partnership worth over $500 billion with the SK Group, which includes the parent company of South Korea's SK Hynix. Concerns are growing in the market regarding the quality of earnings in a structure where the seller, NVIDIA, provides funds or credit to business partners to generate sales.
Reflecting these concerns, the cost of credit default swaps (CDS) insuring NVIDIA's credit risk reportedly recorded one of its largest increases ever. It has also been pointed out that rising interest rates could put further pressure on AI-related companies that are increasingly dependent on debt financing. In the market, there is a growing stance of strictly assessing the path to investment recovery, questioning when and to what extent massive AI-related investments will bear fruit in terms of actual earnings.
China's CXMT surges 466% on listing, changing the industry map
China's largest memory semiconductor manufacturer, CXMT, listed its shares on the Shanghai Stock Exchange's STAR Market on the 27th. The stock price soared 466% from the offering price on the first day of trading, jumping to the top of the market capitalization list for mainland Chinese listed companies. Investor funds have concentrated there against the backdrop of expanding global demand for AI infrastructure.
Regarding this listing, concerns have been raised about a shift in funds away from existing semiconductor memory manufacturers and the potential for oversupply. Additionally, reports that China has begun mass production of domestically developed immersion deep ultraviolet (DUV) lithography equipment are weighing on the market, and shares of Dutch semiconductor manufacturing equipment giant ASML, which has long held a high market share in this field, are also being sold. Caution has spread to semiconductor-related stocks in the Tokyo market, including domestic memory giant Kioxia Holdings. A strategist at Toyo Securities pointed out that following reports regarding the CXMT listing and the start of mass production of Chinese-made DUV lithography equipment, caution regarding the future outlook is spreading, centered on the semiconductor sector.
Earthquake with seismic intensity 7 in Kumamoto, supply chain risks re-recognized
On the 28th, an earthquake with a maximum seismic intensity of 7 occurred in Kumamoto Prefecture. Following this earthquake in the Kyushu region, where semiconductor and automobile factories are concentrated, there are concerns about the impact on the high-tech industry's supply chain. The full extent of the damage remains unclear, and information gathering on the operational status of related companies' factories is ongoing. Factories related to semiconductors, electronic components, and transportation equipment are concentrated around the epicenter, and some in the market are holding off on investment decisions for related stocks until the damage situation is clarified. A tsunami advisory was also briefly issued, and the impact extended over a wide area of the region.
Tokyo market soft today, Nikkei Average toward the low 60,000 yen range
In the Tokyo stock market on the 29th, the Nikkei Stock Average is expected to have a heavy upside. In addition to concerns about the future of AI demand, there are indications that it will be difficult to attract buying in related stocks because the operational status of manufacturing factories is unclear following the Kumamoto earthquake. The expected range for the Nikkei Average is 61,500 to 63,000 yen. With earnings announcements from Meta Platforms and Microsoft in the U.S. pending, a wait-and-see approach is likely to spread. Domestically, Hitachi, Komatsu, and ANA Holdings are scheduled to announce earnings, and new listings are also planned. The head of the investment information office at Okachi Securities stated that it is difficult to forecast the future of Japanese stocks without looking at the trends in Korean stocks, and regarding the impact of the Kumamoto earthquake, expressed the view that it is difficult to buy related stocks until the full extent of the damage is known, as there are factories of automobile and semiconductor companies.
Middle East situation moving toward easing, lower oil prices support the market
There are also signs of easing in the geopolitical risks surrounding the stock market. As the White House welcomes Israeli Prime Minister Netanyahu and Ukrainian President Zelensky, expectations that tensions in the Middle East and Ukraine will ease helped support the overall market with a decline in oil prices in the U.S. market on the 28th. However, attacks by Iran on U.S. military bases have also been reported, and oil prices continue to show unstable movements. As of the 29th, U.S. WTI crude oil futures are trading in the $82 per barrel range. The Middle East situation remains fluid, and the market continues to see developments where progress in peace talks and the resurgence of military tensions alternate as market factors.
Currency remains firm against the dollar, watching decisions by U.S. and Japanese central banks
In the foreign exchange market, the dollar fell but remains near a one-month high. The dollar index against major currencies was down 0.2% at 101.35, but maintained a level close to the high of 101.80 set in late June. U.S. Treasury yields have been rising steadily since April, against the backdrop of rising inflation concerns following tensions in the Middle East and rate hike expectations based on the hawkish stance of Fed Chair Warsh.
The FOMC results will be announced on the 29th. According to the CME FedWatch tool, the market is pricing in a 71% probability of the policy interest rate being held steady, and a 29% probability of a 0.25 percentage point rate hike. Meanwhile, LSEG data shows that the probability of a 25 basis point rate hike is priced in at about 40%, up from about 20% a week ago, and the probability of a rate hike by September is seen at about 95%. The chief market strategist at Corpay pointed out that while a rate hike would be a factor pushing up the dollar, even a hawkish hold would only carry over rate hike expectations to September, and in any case, the dollar looks to have a bullish tone.
Within the week, the Bank of England and the Bank of Japan will also hold monetary policy meetings on the 30th and 31st, respectively. The Bank of Japan is expected to keep its policy rate unchanged while leaving open the possibility of additional rate hikes to support the yen, but there is a view that officials are likely to maintain an ambiguous stance on the timing and pace of rate hikes. Karl Schamotta of Corpay pointed out that speculative dollar long positions are building up, and warned that if even the slightest dovish stance is suggested by policymakers, there is a risk of a sharp reversal. In late trading on the 28th, the dollar was almost flat against the yen at 163.77 yen, and the euro was 0.2% higher at 1.1393 dollars. With major central bank decisions in the U.S., Japan, and Europe following one after another this week in addition to the FOMC, the market is expected to continue to see phases where fluctuations in exchange rates and interest rates are likely to expand.
