Easing Tensions in the Middle East and Chip Rally Push Asia-Pacific Indices to ATH; Korea Composite Index Surpasses 7,000 Points as Samsung Market Cap Exceeds $1 Trillion

Trump signaled an easing of tensions in the Middle East, coupled with a surge in US chip stocks to new highs overnight. Samsung Electronics' market capitalization broke through $1 trillion, supporting the Korea Composite Index above 7,000 points, while MSCI Asia-Pacific and emerging market indices also hit all-time highs.

Wallstreetcn mentioned that Trump posted on social media on Tuesday stating that the US would suspend the "Freedom of Navigation" plan guiding ships through the Strait of Hormuz, leaving room for negotiations on a US-Iran agreement.

A team led by JPMorgan strategist Mislav Matejka pointed out that the rebound in global stocks from the lows during the Iran war has been narrow, and the market is poised for action; even slight positive news is enough to trigger a broader rally.

Chris Senyek of Wolfe Research stated that his baseline scenario has always been that the US and Iran will reach a settlement in the near term, and energy prices will fall after the reopening of the Strait of Hormuz.

As a result, Brent crude fell more than 1% to around $108 per barrel, and WTI crude dropped more than 1.3% to around $101 per barrel. The decline in energy prices boosted market expectations for cooling inflation and improved economic growth.

During the Asia-Pacific trading session, performance of other major asset classes:

• The MSCI Asia Pacific (ex-Japan) Index rose 1.7%, the MSCI Emerging Markets Index rose 1.5%, and the MSCI World Index rose 0.2%, with all three touching historical highs.
• The Seoul Composite Index in South Korea broke through 7,000 points for the first time, surging more than 5% and triggering circuit breakers; Australian stocks rose 0.35%; Japanese markets were closed for a holiday.
• S&P 500 Index Futures rose 0.2%, Nasdaq 100 Futures rose 0.6%, European Stoxx 50 Index futures rose 0.6%, German DAX Futures rose 0.6%, and UK FTSE 100 futures rose 0.9%.
• The US Dollar Index fell 0.3%, the Australian Dollar vs US Dollar and New Zealand Dollar vs US Dollar each rose more than 0.5% during the day, and the South Korean won strengthened to 1,460 per US dollar, marking its strongest level since April 17.
• Spot Gold rose nearly 1% intraday to above $4,600 per ounce.

Samsung Crosses the $1 Trillion Threshold, South Korean Market Stands Out

Wallstreetcn mentioned that Apple is considering collaborating with Intel and Samsung to produce main device chips. The news spurred Intel's stock price to soar 13% overnight, with memory stocks rising sharply in tandem.

At the opening on Wednesday, Samsung Electronics surged more than 11% at one point, with its market capitalization exceeding $1 trillion, becoming the second company in Asia after TSMC to reach this milestone.

SK Hynix also jumped nearly 10% at the open, with both Samsung and SK Hynix refreshing their all-time highs.

The two companies combined account for more than 43% of the weight in the Korea Composite Index. Driven by this, the Seoul Composite Index broke through 7,000 points for the first time, with intraday gains exceeding 5% at one point. KOSPI 200 futures triggered circuit breakers, and program trading was suspended for 5 minutes.

Samsung's previously announced first-quarter results showed that profits in its semiconductor division surged 48-fold year-on-year, significantly exceeding market expectations, with AI data center orders bringing substantial profit margins.

Analysts expect that as contract prices continue to rise and supply remains tight, the division will continue its record-breaking profitability momentum in the coming quarters. Dave Mazza, CEO of Roundhill Investments, stated:

The significance of the $1 trillion threshold goes far beyond symbolism. More broadly, it reflects the market's judgment that the role of memory in AI infrastructure is structural, not cyclical.

Sam Konrad, investment manager at Jupiter Asset Management, also pointed out that the memory market is currently in a state of shortage. Samsung indicated that supply and demand in 2027 will be tighter than in 2026, with NAND and DRAM prices expected to continue rising.

According to sell-side analyst forecasts compiled by Bloomberg, Samsung's stock price is expected to rise by about 30% over the next 12 months, while its current P/E ratio is only 5.3 times forward earnings for one year, far below the 14.4 times recorded in October.

However, Samsung is not without concerns. Profits in its mobile and display businesses are being suppressed by rising raw material and component prices; meanwhile, the AI dividend has also sparked internal distribution conflicts, with employees threatening to launch an 18-day comprehensive strike later this month.

Easing Signals in the Middle East Combined with Strong Technicals Boost Risk Sentiment

The overall upward trend in global stocks benefits from the simultaneous decline in geopolitical risk premiums.

According to Xinhua News Agency, Trump announced this decision on social media on the evening of the 5th, US Eastern Time. This move came just one day after the US Navy dispatched two missile destroyers into the Persian Gulf and initiated the plan.

Trump stated that the US and Iranian representatives had made "huge progress" in reaching a comprehensive final agreement. He pointed out that the suspension of escort operations was made at the request of Pakistan and other countries, with Pakistan currently assisting in mediating negotiations between Washington and Tehran.

However, he emphasized that the US blockade of ships entering and exiting Iranian ports would continue to be "fully effective." Julian Koski of New Age Alpha believed:

Investors are trying to capture signals from the Iran war and oil price movements, but history shows that stock markets can quickly digest geopolitical events, and the current situation is no exception.

Easing tensions in the Middle East pressured oil prices, while fading inflation expectations boosted risk appetite.

During the US-Israel hedging against the Iran war, the US dollar was the preferred safe-haven asset; as geopolitical tensions eased, declining safe-haven demand led to a 0.2% weakening of the US dollar during the day.

The Japanese Yen appreciated slightly by about 0.15%.

Spot gold rose more than 1% during the day, breaking through the $4,600-$4,610 per ounce range intraday.