August 4th Market Report: Dow Hits Record High on Trump's Iran Attack Decision; Big Tech Trends Including Amazon and Apple

Market Trends Align with Geopolitical Risk Easing and Tech Stock Rally

On the 3rd, the New York stock market closed uniformly higher, bolstered by expectations of eased tensions in the Middle East following U.S. President Donald Trump's decision to hold off on plans to attack Iran. The sharp drop in oil prices, combined with the rise in large-cap technology stocks, drove the Dow Jones Industrial Average to a record closing high. On the same day, shares of major Big Tech firms experienced minor fluctuations. Amazon finished trading at 271.58 won, up 0.15% from the previous day, while Apple and Micron showed weakness, falling 0.07% and 0.06% respectively.

Ticker	Price	Change	Market Cap	PER
Amazon	271.58 won	+0.15%	2.92T won	21.8
Apple	308.91 won	-0.07%	4.54T won	35.5
Micron	823.03 won	-0.06%	0.93T won	18.6
NVIDIA	200.75 won	+0.03%	4.86T won	30.8
Tesla	311.21 won	+0.01%	1.23T won	285.5

While these major stocks exhibited defensive movements, an analysis of the top large-cap stocks by market capitalization confirms that the market's underlying strength remains healthy. NVIDIA maintained its position at the top with a market cap of 4.86 trillion won, recording a modest increase of 0.03%. Its price-to-earnings ratio (PER) stood at 30.8. Meanwhile, Apple, despite a minor adjustment from 333.43 won the previous day to 308.91 won, continues to demonstrate formidable influence with a market cap of 4.54 trillion won. In particular, Amazon showed positive momentum by rising 0.15% during the session. These movements are interpreted as the result of easing inflationary pressures due to falling international oil prices positively impacting consumer and cloud companies.

Semiconductor Sector Profitability and Stock Resilience

The improvement in performance within the semiconductor sector is becoming increasingly distinct amid expanding demand for artificial intelligence (AI). NVIDIA's earnings per share (EPS) growth rate reaches a staggering 6599.3%. Additionally, Micron's EPS growth rate is showing a stable trend, meeting market expectations. Nevertheless, Micron's stock closed at 823.03 won, down 0.06% on the day. This is attributed to short-term profit-taking selling. However, given the low valuation with a PER of 18.6, the price adjustment is interpreted as an attractive entry opportunity.

ASML, a semiconductor equipment company, also recorded a somewhat high PER of 55.9. The stock price stopped moving at 1,629 won, down 0.01%. This indicates that the explosive earnings growth anticipated by investors has been largely priced into the stock. However, as the semiconductor equipment investment cycle begins in earnest, its investment value from a medium-to-long-term perspective remains valid. In the case of Intel, although it is in the red with no calculated PER, it shows a miraculous recovery trend with an EPS growth rate of 9865.5%. Structural improvements are currently underway.

Valuation Gaps in Growth Stocks and Implications for the Domestic Market

As macroeconomic uncertainties dissipate, corporate fundamentals are emerging as the decisive variable for stock prices. Energy companies like ExxonMobil and Chevron took a direct hit from falling international oil prices, ending the day with declines of 0.01% and 0.02% respectively, or remaining flat. In contrast, the healthcare sector, led by Johnson & Johnson, took on a defensive color and led the trend, riding on a high EPS growth rate of 8887.0%.

This global stock market flow provides important clues for the domestic market. This is the backdrop for President Lee Jae-myung chairing a stock market inspection meeting for seven and a half hours immediately upon his return on the 3rd. According to the Blue House, measures to manage stock market volatility caused by the semiconductor concentration and the expansion of leverage trading were intensively discussed. The strong fundamentals of global Big Tech are directly linked to domestic semiconductor beneficiaries. However, capital concentration in specific sectors carries the risk of leading to a sell-off in the event of a market shock.

In conclusion, the technology stock rally in the U.S. market is assessed as a robust recovery based on performance rather than a bubble. The overwhelming earnings growth trends of AI-related large caps, including NVIDIA, justify the high price-to-earnings ratios. Moving forward, the market is expected to undergo a thorough bifurcation based on companies' specific ability to generate earnings. Investors should maintain a strategy of closely analyzing qualitative growth indicators for each company rather than being swept up in short-term momentum.