Memory chip stocks rebounded sharply in U.S. trading, with SK Hynix up 17.52%, SanDisk rising 25.99%, Micron gaining 18.36%, and Microsoft adding 15.51%. The VIX volatility index fell 17.28% on the day. After a brutal sell-off only days earlier, the group turned higher in a single session.
The source article says the move was not driven by one factor alone. It points instead to a combination of policy support in South Korea, softer U.S. inflation data, Microsoft’s latest earnings, and a short-covering rally. Even so, it frames the central question as unresolved: whether the rebound marks the start of a real turn or a textbook dead-cat bounce.
South Korea weighs market support measures
The first signal highlighted in the article came from South Korea, described as the center of the recent sell-off. After several days of declines, the Korea Exchange, or KRX, internally reviewed the technical feasibility and system preparation time required for a temporary short-selling ban. It also examined whether the current 30% daily price limit could be narrowed.
South Korea’s Ministry of Economy and Finance also held an emergency market assessment meeting. Afterward, authorities said they would keep the highest level of market alert in place and launch a 24-hour cross-ministerial monitoring mechanism.
The article says the response carries political sensitivity. South Korean authorities had previously encouraged retail participation in the AI chip rally led by Samsung Electronics and SK Hynix. With retail investors suffering heavy losses within 48 hours, policymakers were pushed into a difficult position between avoiding intervention and responding to public pressure.
In the article’s reading, expectations for a short-selling ban and discussion around tighter price limits could help contain near-term selling pressure. At minimum, it argues, a policy floor has appeared before a market floor.
Deleveraging appears to be in its later stage
The article also points to deleveraging in South Korea as a key part of the move. The KOSPI index broke below its 50-day, 100-day, and 200-day moving averages during the sell-off, leaving the technical picture broadly damaged.
At the same time, leveraged ETF assets fell from a June peak of more than $50 billion to about $16 billion, a drop of nearly 70%. The article says that figure matters because, while leverage may not be fully cleared, such a steep contraction suggests the deleveraging process has moved into a later stage. In that view, the worst forced-liquidation phase has probably passed, leaving more sentiment-driven selling than mechanically driven pressure.
That combination — policy support from South Korea and leverage being flushed out — is presented as the first reason the rebound was able to take hold in Asian trading before spilling over.
U.S. inflation data and Microsoft earnings added fuel
The second layer came from the U.S. The article says U.S. Q2 core PCE inflation cooled, causing short-term rate-hike expectations to fall and liquidity expectations to loosen quickly.
Microsoft’s results became the bigger catalyst. According to the article, Microsoft reported $90 billion in revenue for fiscal 2026 fourth quarter, up 18% year over year. Azure and other cloud services growth accelerated to 43% from 40% in the previous quarter. Chief executive Satya Nadella said Azure generated more than $100 billion in full-year revenue, up 41%, the first time the business has crossed that mark.
Markets reacted immediately. Microsoft jumped more than 15% in one day. The article describes that as the largest single-day market-value increase ever recorded on Wall Street for an individual stock and Microsoft’s biggest one-day gain in 18 years. With selling pressure from the earlier liquidation of large AI funds fading, technology and momentum names also moved into a short-covering rebound.
The article argues that Microsoft’s earnings mattered for memory stocks because one of the main bearish narratives behind the sector sell-off was the idea that the AI bubble had cracked and capital spending could not be sustained. In that framework, Microsoft’s report pointed the other way: demand had not slowed and was still accelerating. That, in turn, undermined the bearish narrative and forced short covering.
Japan rate expectations remain an overhang
The article also cautions against reading the rebound too aggressively. It says Japan’s inflation has accelerated for a second straight month, keeping the prospect of another Bank of Japan rate hike in the coming months on the table.
Data from Japan’s Ministry of Internal Affairs and Communications showed Tokyo core CPI rose 1.9% in July from a year earlier, above the 1.8% market expectation. Core-core CPI, which excludes fresh food and energy, rose 2%, while headline CPI also increased 2%. Takeshi Minami, chief economist at the Norinchukin Research Institute, said inflation would remain above 2%.
The article says markets widely expect the Bank of Japan to keep rates unchanged at 1% at this Friday’s meeting, though it may signal room for more tightening. That matters, it argues, because the funding side of the U.S.-Japan carry trade is becoming more expensive. It points back to the sharp global volatility seen in August 2024, which it says was triggered by large-scale unwinding of yen carry trades. In the article’s framing, Korean deleveraging is the visible line in this move, while Japan rate expectations are the hidden line overhead. They may not decide whether a rebound happens, but they can affect how far it runs.
What the market is watching next
The article says Microsoft’s earnings helped answer one question — whether AI capital spending can continue — but left another one open: whether the memory industry can sustain high profit levels as the supply cycle advances and as China’s ChangXin Memory Technologies moves toward a listing.
It lists several items to watch next:
- whether memory stocks can hold their gains and whether South Korean equities avoid another fade after an early surge;
- whether prices and orders for HBM, DRAM, and NAND continue to be revised higher;
- the Future Memory Conference on Aug. 4;
- SK Hynix’s HBM4 volume ramp progress in Q3;
- Nvidia’s earnings report on Aug. 26.
Article conclusion and disclaimer
The article’s conclusion is that a policy floor has emerged, deleveraging has entered a later stage, and Microsoft has reaffirmed the AI demand narrative. At the same time, expectations around Japan rate hikes have not yet been settled, and the memory supply cycle still needs to be tested. On that basis, it says the market is not yet at a point where investors can confidently declare a full bull-market return.
The article also says investors should avoid two mistakes in this kind of tape: panic selling at the bottom and chasing prices after a violent rebound. It argues that position discipline matters more than trying to predict precise price levels. It also mentions that investors may consider using options offered by BIT Broker to hedge underlying assets against coming volatility.
The disclaimer states that the piece was contributed by an external author and reflects only the author’s personal views, not the position, views, or opinions of BIT or its affiliates. It adds that the information is for reference only and does not constitute investment advice, investment solicitation, or a recommendation of securities or financial products, and should not be used as the basis for investment decisions. Financial markets carry risk, asset prices can fluctuate sharply, and investors should make independent decisions based on their own circumstances and bear the related risks.