While Middle East risks and interest rate pressures have eased, semiconductors were the true price drivers of the market this week. [Photo: Hanmi Ilbo Graphics]The market valued the sustainability of AI infrastructure more than Middle East risks

Middle East risks have not disappeared. However, the key variable that shook the market this week was neither the Strait of Hormuz nor international oil prices. Despite receiving favorable news—stabilized oil prices and eased interest rate pressures—the market faltered again in the face of a correction in the semiconductor sector.

Last week, the question from Money Radar was this:

“What did the market weigh more heavily: Middle East risks or relief over U.S. PCE inflation data?”

The market's answer became clearer this week. The market did not price in the Middle East risk as a full-scale war. WTI fluctuated around $70 throughout the week, and concerns over crude oil supply shocks subsided as expectations for follow-up negotiations between the U.S. and Iran continued. As oil prices avoided a sharp spike, concerns over re-accelerating inflation were also partially mitigated.

However, this time the market focused not on oil prices, but on semiconductors. The Philadelphia Semiconductor Index fluctuated significantly as skepticism emerged regarding whether the pace of AI infrastructure investment was too aggressive.

With a confluence of factors—Meta's consideration of selling surplus AI computing resources, Michael Burry's increased short positions in semiconductors, and controversies over massive investments by Korean memory manufacturers—the market's focus shifted from “war risk” to “AI demand risk.”

The theme of this week's trend is ‘correction amidst relief.’

Oil prices stabilized, and interest rate burdens eased somewhat. U.S. employment data for June showed signs of a cooling labor market, and 2-year Treasury yields fell. Under normal circumstances, this is a combination favorable to growth stocks. However, as the semiconductor sector faltered, the Nasdaq showed weakness, decoupling from the Dow Jones Industrial Average, which was buoyed by healthcare, consumer staples, and utility stocks.

The question for this week is:

“Even though oil prices and interest rates provided stability, why did the market react more sensitively to the semiconductor correction?”

The answer is that the central pillar of the market has shifted. The heart of this rally was AI infrastructure.

If oil prices and interest rates determine the discount rate for the entire market, semiconductors determine the earnings expectations for this bull market. Even if the burden of the discount rate decreases slightly, the market reacts more strongly when the central axis of earnings expectations is shaken.

The conclusion in one sentence is as follows:

“The market did not overcome Middle East risks this week; rather, it found itself back on the testing ground in the face of AI semiconductor risks.”

Next week's checkpoints are fourfold.

First, we must verify if WTI stabilizes around the $70 level.

Second, we must observe whether the U.S. 10-year Treasury yield rises back above 4.5%.

Third, we must assess whether the semiconductor correction will end as a simple profit-taking move or solidify into a thesis of a cooling AI investment cycle.

Fourth, we must confirm whether the decoupling between the Nasdaq and the Dow continues.

※ This material is for reference and analysis of market trends and is not a recommendation to buy or sell any specific financial product.