Wall Street and oil prices tread water as investors eye SK Hynix, Middle East tensions

By Nell Mackenzie and Pete Schroeder

LONDON/WASHINGTON, July 10 (Reuters) - Global stocks rose on Friday but Wall Street opened in mixed territory, as AI-related enthusiasm over the market debut of South Korean chip bellwether SK Hynix led investors to brush off tit-for-tat attacks between the U.S. and Iran. 

The Dow Jones Industrial Average was up 0.16% in early trading, to 52,572.69, while the S&P 500 was mostly flat, climbing just 0.06% to 7,548.32. The Nasdaq Composite was down 0.25%, to 26,141.32. 

While the renewed back-and-forth attacks have further eroded the fragile three-week-old U.S.-Iran ceasefire, markets have mostly taken developments in the Middle East in their stride, although oil prices and their inflationary impact are back on investors' radar.

INVESTORS RESILIENT TO GEOPOLITICAL RISKS

European shares were muted on Friday, with the pan-European STOXX 600 up 0.17%, remaining on track for a weekly loss that could snap a four-week winning streak. MSCI's gauge of stocks across the globe was up 0.22%.

Japan's bond market and currency lurched higher after Finance Minister Satsuki Katayama said on Friday the government wants to explore ways to encourage pension funds, including the Government Pension Investment Fund, to increase their holdings of domestic financial assets. The yield on benchmark U.S. 10-year notes rose 1.22 basis points to 4.551%.

Brent crude futures were set for a 5% week-on-week rise, the strongest weekly performance since early May. But at $76.25 per barrel, down 0.1% on the day, Brent has given up most of the gains it picked up when the conflict began at the end of February. U.S. crude fell 0.39% to $71.80 a barrel.

"Oil prices have also remained remarkably calm despite the conflict spilling over (once again) into some neighbouring countries," said BMO Senior Economist Carl Campus in a note. "While there are several factors that could be helping prevent a bigger surge ... perhaps it’s simply a reflection of the underlying optimism regarding ongoing talks."

Attention is on SK Hynix's U.S. market debut Friday after the firm priced its American Depositary Receipts at $149 on Thursday, raising about $26.5 billion, indicating strong investor appetite to gain exposure to the AI supply chain.

The blockbuster offering, which will finance new factories and equipment to meet surging AI chip demand, is set to be the world's second-biggest share sale after SpaceX's record-breaking IPO last month. SK Hynix's U.S.-listed shares were indicated to jump 20% in their Nasdaq debut following its $26.5 billion share sale, signalling strong enthusiasm in semiconductor stocks despite a recent pullback.

SK Hynix's South Korean shares have more than tripled this year, taking the broader benchmark to record highs and making the KOSPI the world's best-performing major stock market since the start of 2025.

YEN GETS A LIFT 

In currency markets, attention remained on the Japanese yen, which firmed sharply after Katayama's comments suggesting repatriation could be in store for Japanese investors. 

It was last 0.4% stronger at 161.76 per U.S. dollar. The frail yen has been hanging around its lowest level in 40 years in recent days as traders kept a watch for official intervention from Tokyo. [FRX/] 

The dollar otherwise was mostly muted as investors awaited catalysts to gauge the path of U.S. interest rates. Traders are pricing in 34 basis points of hikes for the year, but that may change depending on the inflation pressure from the war. The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.02% to 100.89.

(Reporting by Nell Mackenzie in London and Pete Schroeder in Washington; additional reporting by Ankur Banerjee in Singapore; Editing by Tom Hogue, Jan Harvey, Susan Fenton and Nick Zieminski)