Storage-chip makers and major technology shares staged a powerful one-day rebound as cooling US inflation data and Microsoft’s accelerating cloud growth eased pressure on risk assets. SK Hynix rose 17.52%, SanDisk climbed 25.99%, Micron gained 18.36%, and Microsoft advanced 15.51%, while the Cboe Volatility Index, or VIX, fell 17.28% during the same session.
The move followed a steep market decline that had pushed South Korea’s KOSPI below its 50-day, 100-day and 200-day moving averages, a sign that selling had spread beyond a small group of stocks. The rebound also came after leveraged ETF assets dropped from more than $50 billion at their June peak to roughly $16 billion, according to the figures provided, reducing the amount of debt-backed positioning that can amplify declines through forced selling.
Microsoft’s results added a concrete earnings catalyst to the broader relief rally. The company reported $90 billion in revenue for its fiscal 2026 fourth quarter, an 18% increase from a year earlier. Azure and other cloud services revenue grew 43%, up from 40% in the previous quarter.
Satya Nadella, Microsoft’s chairman and chief executive officer, said Azure’s full-year revenue exceeded $100 billion for the first time, increasing 41% from the prior year. The figures reinforced the view that spending on AI infrastructure and cloud capacity remains resilient despite recent concerns over technology valuations and semiconductor demand.
Inflation data shifts the rate outlook
The latest US core personal consumption expenditures reading showed inflation cooling, reducing expectations that the Federal Reserve would need to raise interest rates again in the near term. Core PCE is the Fed’s preferred inflation gauge because it excludes food and energy prices, which can move sharply from month to month.
Lower expectations for additional rate increases typically support longer-duration assets, including high-growth technology stocks, because future earnings are discounted at a less punitive rate. The reaction was especially pronounced among companies linked to AI data centers, where valuations have become highly sensitive to changes in bond yields and financing conditions.
The market response did not establish that the Fed is preparing rapid interest-rate cuts. A slowing inflation measure gives policymakers more flexibility, but the path of rates will still depend on employment, consumer spending and subsequent inflation readings. For crypto markets, which often trade alongside technology stocks during abrupt shifts in risk appetite, the combination of reduced volatility and a less restrictive rate outlook may ease short-term pressure without resolving larger macroeconomic risks.
South Korea weighs market-stabilization measures
South Korean authorities are examining possible measures after the country’s stock-market slide. The Korea Exchange reviewed the technical feasibility and system-preparation time needed for a temporary short-selling ban, according to the information provided. It also considered whether the current 30% daily price-limit band should be narrowed.
A short-selling restriction would limit traders’ ability to profit from falling share prices, a tool authorities sometimes consider during periods of market stress. Narrowing daily price bands could reduce the size of individual-session losses, though it can also delay price discovery by restricting how quickly securities adjust to new information.
South Korea’s Ministry of Economy and Finance convened an emergency market-assessment meeting, maintained the highest market-alert level, and began a 24-hour cross-agency monitoring arrangement. Those steps place policymakers in a more active supervisory role as they assess whether the recent selling was being driven by deteriorating fundamentals, leverage unwinds or market-structure pressures.
The decline in leveraged ETF assets suggests a substantial part of the most fragile positioning has already been removed. Such products can magnify market moves because their managers must frequently rebalance holdings to maintain targeted exposure. When markets fall rapidly, that process can create additional selling; when the deleveraging cycle slows, rebounds can become sharper as short positions are covered and buyers return.
Japan remains a potential source of volatility
Japan’s inflation data remain a central risk for global asset prices. Tokyo core consumer prices rose 1.9% year over year in July, above the 1.8% consensus forecast, according to Japan’s Ministry of Internal Affairs and Communications. The core-core measure, which excludes fresh food and energy, rose 2%, while headline CPI also increased 2%.
The data strengthened the case for the Bank of Japan to retain a tightening bias. Markets broadly expected the central bank to leave its policy rate unchanged at 1% at its Friday meeting, while watching for language indicating that further rate increases remain under consideration.
Japanese policy matters beyond domestic equities and bonds because low Japanese interest rates have long supported yen-funded carry trades. In a carry trade, participants borrow in a low-yielding currency and buy assets offering higher expected returns elsewhere. Higher Japanese rates, or a rapidly strengthening yen, can raise the cost of those positions and prompt quick deleveraging across stocks, bonds, currencies and digital assets.
The Bank for International Settlements has estimated that cross-border loans connected to the yen total about $2.2 trillion. That figure illustrates why even modest shifts in Japanese monetary policy can travel through global funding markets, particularly when traders are heavily positioned in leveraged assets.
Memory pricing and Nvidia earnings become next tests
Attention is now moving from the immediate rebound toward evidence of sustained demand in the memory-chip supply chain. Pricing and order trends for high-bandwidth memory, DRAM and NAND will help determine whether the gains in SK Hynix, Micron and SanDisk reflect improving fundamentals or a short-lived recovery after heavy selling.
Upcoming industry events could provide fresh signals. The Future Memory Conference is scheduled for Aug. 4, while SK Hynix plans to begin its HBM4 volume ramp in the third quarter. Nvidia’s Aug. 26 earnings report is likely to offer another major readout on data-center demand, AI accelerator shipments and the availability of advanced memory.
Market participants are also monitoring potential supply developments involving China’s ChangXin Memory and a possible listing. Any expansion in Chinese memory production could affect pricing and competitive conditions, though the consequences would depend on the products involved, production scale and the pace of qualification by major customers.
The rebound has reduced immediate stress across technology shares, but the next phase will depend on whether memory demand, cloud spending and central-bank policy continue to support risk appetite. Japan’s rate guidance and the semiconductor industry’s late-summer earnings calendar now provide the clearest near-term tests.
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