Nasdaq Composite Gains 1.3% on Semiconductor Stocks

Stock markets closed Thursday's session on a positive note, with the Nasdaq Composite posting a gain of 1.3%. This gain was largely supported by semiconductor stocks, which benefited from strong industrial demand and an improving supply chain. At the same time, oil prices experienced a slight decline, which reduced inflationary pressures on production costs for oil companies and supported the performance of refiners. These combined factors created a favorable environment for investors, while expectations now turn to Delta Air Lines results and the upcoming initial public offering of SK Hynix on the Nasdaq.

Delta Air Lines Reports Results

Delta Air Lines will announce its quarterly figures on the Squawk Box program at 6 a.m. The company's stock has risen 31% over the past three months. However, the stock has fallen 7% from its July 2 high.

Investors are closely watching Delta's performance for several reasons:

• Expected financial results: The report should confirm an improvement in gross margin, supported by rising demand for business and leisure travel, as well as effective fuel cost management.
• Sector comparison: Southwest Airlines, whose stock has risen 22% over the past three months, is down 10% from its February peak. American Airlines, meanwhile, has risen 50% over the past three months but has fallen 9% since July 2.
• Impact of global demand: U.S. airlines are benefiting from strong domestic demand and expansion of international routes, particularly to Asia and Europe, which supports freight and passenger revenues.
• Fuel management: Fuel prices remain volatile, but Delta has recently implemented hedging strategies that have limited the impact on its margins.

Delta's CEO will also appear on Squawk Box at 7 a.m., offering analysts and investors an opportunity to gain real-time insights into the results and future outlook.

SK Hynix Goes Public

On Friday, SK Hynix will launch its shares on the Nasdaq at a price of $149 per share. This IPO represents a major milestone for the company, which already accounts for about 25% of the weight of the iShares MSCI South Korea ETF (EWY). The ETF, which has risen 90% year-to-date, is down 16% from its high three weeks ago.

Investors expect several key points:

• Valuation and growth: The $149 price is considered an attractive valuation given SK Hynix's dominant position in DRAM memory chip manufacturing, a segment in high demand for cloud servers and mobile devices.
• Expected volatility: Jim Cramer of Mad Money noted that there is potential for upside, but investors should be prepared for volatility related to the semiconductor industry cycles.
• Leadership presence: Chey Tae-won, chairman of SK Group, will appear on Squawk on the Street at 10 a.m., offering insight into long-term growth strategy and international expansion plans.
• Macroeconomic context: The IPO comes amid robust global demand for semiconductors, supported by the expansion of digital infrastructure and the rise of 5G and AI technologies.

Refiners Benefit from Rising Diesel Prices

Diesel prices have risen in recent weeks due to disruptions in Russian oil production and the ongoing war between Russia and Ukraine. These factors have reduced global crude oil supply, leading to higher crude oil prices and, by extension, higher refining costs.

Shares of major U.S. refiners have performed remarkably:

• Valero hit a new high, gaining 5% in four days.
• Marathon Petroleum and Phillips 66 also posted solid performances, supported by higher refining margins due to rising diesel prices.

This dynamic is fueled by several economic mechanisms:

• Supply and demand effect: The reduction in crude oil supply has created upward pressure on prices, which increases refiners' profit margins when diesel prices remain high.
• Production costs: Refiners have had to adjust their production costs in response to crude oil price fluctuations, but rising diesel prices have offset these costs.
• Geopolitical context: The situation in the Persian Gulf, particularly the security of the Strait of Hormuz, remains a risk factor for oil supply chains.

Impact on Markets

The next market moves will largely depend on several key factors:

• Delta Air Lines results: An earnings beat could support airline stocks, while a miss could trigger a correction.
• SK Hynix IPO: Investor reaction to the company's valuation and growth prospects will determine the impact on the Nasdaq and the EWY ETF.
• Oil prices and refiner performance: Fluctuations in crude oil prices will continue to influence refinery margins and, by extension, oil company stocks.
• Geopolitical developments: Tensions in the Middle East and sanctions against Russia will remain major risk factors for energy markets.

Investors are encouraged to closely follow CNBC TV broadcasts and economic data to adjust their portfolios based on these developments.

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