South Korean equities extended their decline for a third consecutive session on Wednesday, falling 20% from their recent peak. The benchmark index was dragged lower by volatile trading in semiconductor stocks, as investor sentiment soured on concerns about the artificial intelligence sector. The sell-off reflected broader caution in risk-on assets, with tech uncertainty weighing heavily on the market.
Market Movers and Shakers
In a standout move, Crinetics Pharmaceuticals (CRNX) skyrocketed 98.7% to $83.53 after Vertex Pharmaceuticals announced a $10 billion acquisition deal expected to close in the third quarter of 2026. The stock had already gained 25.5% over the past month on heavy volume. Despite the rally, Crinetics is projected to post a quarterly loss of $1.23 per share, roughly flat year-over-year, though revenue is forecast to surge 1340.6%. Earnings per share estimates have remained unchanged over the past 30 days, and the stock carries a Zacks Rank #3 (Hold). A sector peer, ARS Pharmaceuticals (SPRY), slipped 1.7% as analysts remain divided on its earnings outlook.
US Futures Mixed Amid Rising Oil and Yields
US stock futures showed a mixed picture Wednesday, with S&P 500 contracts edging lower while Dow futures held in positive territory. Oil prices climbed above $72 a barrel as renewed tensions in the Strait of Hormuz pushed crude higher, sending UK gilt yields past 4.8% and reinforcing expectations that interest rates will stay elevated for longer. The ISM Services PMI rose to 54.0, signaling continued expansion in the dominant sector of the US economy, though price gains moderated. Bond markets now price in roughly a 50% chance of a September rate hike. Investors are closely watching upcoming earnings from PepsiCo and Delta Air Lines, as well as the release of the Federal Reserve's FOMC minutes.
Bank of Montreal Bonds Hit Market
Bank of Montreal (TSX:BMO) issued new fixed-income bonds with coupons near 5%, maturing between 2030 and 2036, including callable Eurobonds and Eurodollar formats. The bank's shares have surged 39.44% year-to-date, driving a total return of 70.36% over the past twelve months. However, analysts note that the stock trades approximately 10.8% above a fair value of CA$228.61, while a discounted cash flow model suggests near-fair value at CA$254.35. The bank is investing heavily in digital and AI-powered banking to improve margins and efficiency, though some analysts caution about risks from credit weakness in Canada and rising expenses.
Trump's NATO Remarks Hit Spanish Markets
President Donald Trump criticized Spain during the NATO summit in Turkey, accusing the country of failing to meet the alliance's 5% GDP defense spending target for 2035. Trump called Spain a "terrible partner" and suggested cutting all trade and diplomatic ties. Spanish markets reacted sharply, with 10-year government bond yields rising 7 basis points to 3.54% and the IBEX 35 index falling more than 1%. Spain remains the only NATO member not on track to meet the higher defense spending goal, adding to political risk concerns across Europe.
Vistry Shares Slide on Profit Warning
UK homebuilder Vistry saw its shares drop after the company warned of a first-half loss and announced that finance chief Tim Lawlor is stepping down. The dual blows of a profit warning and a key executive departure weighed heavily on investor sentiment, leading to a sell-off in the stock.
Jet2 Soars on Strong Summer Bookings
In contrast, shares of Jet2 (JET2.L) jumped as much as 16% after the UK travel firm reported a 7.1% increase in summer bookings, despite ongoing tensions between Iran and Israel. The company noted that on-sale capacity rose 7.7% and sharper price cuts boosted the average load factor by 1.2 percentage points. Pretax profit fell 7% to £551 million for the year to March 31. Jet2 has hedged 90% of its annual jet fuel at $743 per ton to mitigate cost pressures, and its new London Gatwick base is performing well. However, JPMorgan warned of near-term risks from intense competition and regional instability.
Market Open: Dow, S&P 500, Nasdaq Slide
The Dow Jones Industrial Average, S&P 500, and Nasdaq all opened lower on Wednesday, pressured by a decline in chip stocks such as Micron, Nvidia, Marvell, and AMD. Geopolitical tensions and tech sector uncertainty set a cautious tone, with investors awaiting the Federal Reserve's FOMC minutes later in the session.
