The US and Japan raised rates back to back, yet semiconductors lifted stocks in all three markets
🎧 Post Summary
On September 21, the KOSPI closed up 1.65% at 7,007.72, finishing above the 7,000 level for the first time since September 10. Samsung Electronics jumped 4.98% and led the gains. Earlier, on September 16, the US Federal Reserve raised its benchmark rate by 0.25 percentage points to 3.75–4.00%, and on September 18 the Bank of Japan lifted its rate to 1.25%, the highest in 31 years. Even so, on September 18 the Philadelphia Semiconductor Index rose 2.78% in New York, and in Tokyo the Nikkei 225 gained 1.38% to close at 65,018.95. In all three markets, chip stocks led the advance. But the US 10-year Treasury yield has climbed back above 5%, and in Japan 64% of Prime market stocks fell on the day the Nikkei rose, so the headline index can be misleading. This week brings the UN General Assembly debate on September 22 and a US–China summit on September 24, while Korean markets are closed on September 24 and 25 for Chuseok.
The biggest story in global markets last week was interest rates. The US Federal Reserve (Fed) raised its benchmark rate on September 16 (US time) for the first time in three years and two months, and two days later the Bank of Japan (BOJ) followed with a hike of its own. Rate hikes are usually treated as bad news for stocks. This time, the outcome was different. The KOSPI won back the 7,000 level on the 21st, and chip-related shares were strong in New York and Tokyo as well. Here is how the Korean, US and Japanese markets each moved, and why, explained simply.
① Why do rate hikes rattle stocks?
Because borrowing costs rise for companies and households, and future profits are valued lower when converted into today’s money. That is why growth stocks, especially tech, are more sensitive to rate hikes. This hike was a potential headwind for markets, too. All 12 voting Fed members backed it, and the median of the ‘dot plot’, which shows each policymaker’s rate forecast as a dot, rose to 4.1%, pointing to one more hike this year. Of the 18 officials who submitted projections, 16 saw another increase at either the October or December meeting. Fed Chair Kevin Warsh explained the decision by saying inflation has stayed above the target for more than five years, while President Trump pushed back, saying rates should be cut sharply. Still, markets had largely priced in the move. Just before the meeting, the probability of a hike stood at 93.5% by the FedWatch measure. Once the result came out, uncertainty faded, and attention shifted to ‘how much more will they raise?’
② Korea — Recovering 7,000 after a four-day slide
The KOSPI closed at 7,033.92 on September 10, then began to slide. Over the next four sessions it fell about 6%, to 6,627.26 on the 15th. Foreign investors were net sellers for six straight sessions, with cumulative net selling of about 11.9 trillion won. On the 16th, ahead of the FOMC decision, dip-buying in chip stocks lifted the index 1.37% to 6,717.97. On the 17th, even after the rate hike was announced, the index slipped just 0.04% to 6,715.41, so the shock was limited.
The mood changed on the 18th. The KOSPI rose 2.66% to 6,894.23, with foreign investors net buying 970.1 billion won and institutions net buying 1.7173 trillion won. Individual investors sold 4.3652 trillion won. Then on the 21st, Samsung Electronics gained 4.98% and the KOSPI rose 1.65% to close at 7,007.72, regaining 7,000 on a closing basis. Fund flows, however, were different that day. Institutions net bought about 1.5 trillion won, while individuals net sold about 3 trillion won and foreign investors were small net sellers. ‘Other corporations’, believed to reflect share buybacks by Samsung Electronics and SK hynix, net bought in the 1.6 trillion won range, which supported the index. While chips rose, battery and auto stocks such as LG Energy Solution (-3.30%) and Hyundai Motor (-1.64%) fell. The KOSDAQ rose 1.11% to close at 836.27.
The Bank of Korea’s benchmark rate stands at 3.00% after back-to-back hikes in July and August, and the gap with the US (upper bound) has widened to 1.00 percentage point. If US rates rise further, that gap could affect foreign fund flows and the won-dollar exchange rate, so it is worth watching.
③ US — Indexes split, only chips smiled
On the 18th (US time), Wall Street ended mixed. The Dow Jones Industrial Average fell 0.18% to 51,682.64, the S&P 500 rose 0.17% to 7,650.50 and the Nasdaq Composite rose 0.39% to 26,522.55. The split came down to Treasury yields and semiconductors. Treasury yields are market-set rates, and when they rise, stocks look relatively less attractive. The 10-year yield moved back above 5%, and the 2-year rose to 4.741%, the highest since July 2024, weighing on sentiment.
On the other hand, the Philadelphia Semiconductor Index jumped 2.78%. Nvidia rose 1.34%, Broadcom 2.97%, AMD 2.70% and Micron 3.92%. For the week as a whole, the Dow fell 1.7% and the S&P 500 fell 0.1%, but the Nasdaq gained 0.7%, showing momentum tilting toward tech. Oil prices falling for a third straight day also gave the market some breathing room.
④ Japan — Highest rates in 31 years, so why did the Nikkei rise?
The Bank of Japan raised its policy rate from 1.0% to 1.25% on the 18th. It is the highest level in 31 years, since 1995, and seven of the nine board members voted in favor. The BOJ explained that high oil prices, a weak yen and rising AI demand are pushing prices up. Governor Kazuo Ueda said, in effect, that the weight has shifted from lifting inflation to containing the risk of prices overshooting the target, and he hinted at further hikes.
Even so, the Nikkei 225 rose 1.38% to close at 65,018.95, its third straight gain. Relief that the hike was as expected, combined with strength in US chip stocks, drove the move. Kioxia Holdings jumped 9.40%, Advantest 5.99% and Tokyo Electron 4.20%, lifting the index. But TOPIX, which covers the broader Tokyo Stock Exchange, slipped 0.07% to 4,091.14, and 64% of Prime market stocks fell. In other words, a handful of chip names created an illusion of broad strength. The yen also failed to gain from the hike and stayed weak. Note that Japanese markets are closed from the 21st through the 23rd for holidays.
⑤ The three markets at a glance
Here is a table summarizing the three markets. Index dates differ by country, so check the dates in the table.
| Category | Korea | US | Japan |
|---|---|---|---|
| Policy rate | 3.00% (Bank of Korea) | 3.75–4.00% (Fed, hiked Sep 16) | 1.25% (BOJ, hiked Sep 18) |
| Benchmark index close | KOSPI 7,007.72 (Sep 21, +1.65%) | S&P 500 7,650.50 (Sep 18, +0.17%) | Nikkei 225 65,018.95 (Sep 18, +1.38%) |
| Leading sector | Chips (Samsung Electronics +4.98%) | Chips (Philadelphia Semiconductor Index +2.78%, Sep 18) | AI and chip-related stocks (Kioxia +9.40%, Advantest +5.99%) |
| Worth noting | Institutions and estimated buyback money supported the index | 10-year yield back above 5% | TOPIX -0.07%, 64% of Prime stocks fell |
⑥ This week’s checkpoints
- Sep 22: The 81st UN General Assembly general debate begins in New York, and President Trump is scheduled to speak on the first day.
- Sep 23: The US September flash PMI (Purchasing Managers’ Index) is released.
- Sep 24: President Trump and Chinese President Xi Jinping hold a summit at the White House. Extending the tariff truce, China’s rare earth export controls and US technology restrictions are cited as key economic items on the agenda.
- Sep 24–25: Korean markets are closed for the Chuseok holiday. Some forecasts say volatility could rise after the holiday, depending on overseas data released during the closure and Micron’s earnings.
Notes for Investors
- With the US 10-year yield hovering around 5% and further hikes possible this year, volatility in growth and chip stocks could rise again depending on the direction of rates.
- A rising index does not mean the whole market is rising. In Japan, 64% of Prime market stocks fell on the day the Nikkei rose, and on the KOSPI on the 21st battery and auto stocks were weak. The deeper the concentration in chips, the wider the gap between the index and the returns investors actually feel.
- The KOSPI’s rise on the 21st was supported by institutions and money estimated to be from share buybacks, while individuals and foreign investors were net sellers. It is worth watching whether that pattern continues.
- Overseas risks continue through the Chuseok holiday, including the US–China summit, the UN General Assembly and Micron’s earnings. Daishin Securities calculated that the KOSPI’s average return over the five sessions after the Chuseok holiday over the past 10 years was +0.68%, but there is no guarantee that past statistics will repeat.
In short, the simple formula ‘rate hike = bad for stocks’ did not hold this time. With the US and Japanese hikes concluding within expectations, uncertainty eased, and chip and AI-related stocks filled the gap. But the rally was concentrated in semiconductors in all three markets, and rates could still rise further. Heading into the holiday, look beyond the index level and check which sectors rose and who was buying.
References
- Money Today — “개미·외인 동반 매도에도… 코스피, 6거래일 만에 7000 돌파” (mt.co.kr, in Korean)
- Herald Business — “드디어 ’27만전자’ 회복…반도체 강세에 코스피 7000선 탈환 [투자360]” (biz.heraldcorp.com, in Korean)
- EBN — “美 증시 혼조 마감…반도체 강세에 나스닥·S&P500 상승” (ebn.co.kr, in Korean)
- Global Economic — “닛케이, 금리 인상 소화하며 6만5000선 회복… 반도체 독식 장세” (g-enews.com, in Korean)
- Betanews — “일본은행, 3개월만 기준금리 1.25%로 인상… 1995년 이후 최고치” (betanews.net, in Korean)
- Newspim — “[종합] 미 연준, 3년 만에 기준금리 인상…연내 추가 한 차례 인상에 무게” (newspim.com, in Korean)
- Newspim — “[미리보는 증시재료] 美·中 정상회담…연휴 기간 코스피 ‘휴장’” (newspim.com, in Korean)