Kospi Jumps 3.1% on Strong Q3 Growth and Chip Stock Gains

European investors trimmed positions on Tuesday, with major indices posting modest declines ahead of key corporate reports and monetary policy meetings. In London, the FTSE 100 dropped 1% to 10,664.58, while Germany's DAX slipped 0.1% to 25,373.71. Paris' CAC 40 fell 0.3% to 7,824.83. Futures for the S&P 500 lost 0.1%, and the Dow Jones Industrial Average was largely unchanged.

Asian markets moved in the opposite direction, supported by strong performance in semiconductor stocks. South Korea's Kospi index closed 3.1% higher at 5,638.34, after briefly surging more than 4% during the session. The gain was led by chipmakers SK Hynix, which rose 5.2%, and Samsung Electronics, which climbed 4.2%. Tokyo's Nikkei 225 added 1.7% to 63,268.37, driven by a 9.6% jump in Advantest shares and a 5% rise in SoftBank Group.

In other Asian hubs, sentiment was mixed. Hong Kong's Hang Seng index reversed early gains to fall 0.7% to 23,041.32, and the Shanghai Composite dropped 1.3% to 3,648.30. Traders in Beijing watched closely for announcements from a closed-door meeting of top leaders of the Communist Party. Australia's S&P/ASX 200 advanced 0.5% to 8,852.10, while India's Sensex slipped 0.5% and Taiwan's Taiex rose 0.1%.

The rally in South Korean shares was bolstered by better-than-expected economic data released Tuesday. The South Korean economy expanded at a 3.4% annual rate in the July-September period, a figure that exceeded analyst estimates. Strong global demand for semiconductors is fueling this growth, setting the stage for upcoming financial results.

SK Hynix will release its third-quarter earnings on Wednesday, one day before Samsung Electronics reports its results. Samsung has estimated that its operating profit for the most recent quarter will be nearly eight times higher than in the same period last year. Investors are using these reports to gauge how artificial intelligence spending is translating into actual revenue and productivity for major technology firms.

U.S. markets are also bracing for major disclosures this week. Alphabet and Microsoft are scheduled to report their latest quarterly results on Wednesday, followed by Amazon on Thursday. These reports will provide further clarity on capital expenditures in the AI sector, a point of contention among investors regarding the sustainability of the current boom.

Concerns over borrowing costs have weighed on AI-related stocks recently. The Federal Reserve hiked the fed funds rate last month for the first time in three years to combat inflation, which remains elevated. Higher interest rates have increased the cost for companies to finance the construction of data centers and the purchase of new chips, leading to volatility in the sector.

This uncertainty was visible in Monday's trading, where Nvidia rose 2.4%, helping it recover from its longest losing streak since June. However, other AI stocks showed mixed performance. Anthropic, which is preparing for its first public stock sale, disclosed details about its current losses on Monday. SpaceX, which operates the xAI business, also saw price swings after announcing a roughly $40 billion deal with an Apollo Global Management entity to lease AI computing power.

In commodities and currency markets on Tuesday, Brent crude oil rose 0.7% to $111.54 per barrel, while U.S. benchmark crude gained 0.7% to $102.47. The U.S. dollar strengthened against the Japanese yen, rising to 157.75 from 157.50, while the euro weakened against the dollar, falling to $1.1154 from $1.1176.