[Good Morning Stock Market] US Semiconductor and Tech Stocks Rally... KOSPI Expected to Start Flat

Overnight, the U.S. stock market closed higher ahead of the Federal Open Market Committee (FOMC) regular meeting and earnings announcements from major technology companies. On the 26th, the KOSPI is expected to start flat.

On the 25th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 35,438.07, up 26.83 points (0.08%) from the previous session. The Dow index rose for 12 consecutive trading days, marking the longest streak since February 2017. The Standard & Poor's (S&P) 500 index closed at 4,567.46, up 12.82 points (0.28%), and the Nasdaq index ended at 14,144.56, up 85.69 points (0.61%).

The U.S. stock market initially showed mixed, flat trading but turned upward after the International Monetary Fund (IMF) revised its global economic growth forecast for this year up by 0.2 percentage points to 3.0%, followed by an improvement in the consumer confidence index. The U.S. consumer confidence index for July reached 117.0, the highest since July 2021, indicating increased household optimism about the economy.

International Monetary Fund (IMF) [Image source=Reuters Yonhap News]

With growing confidence in the economy, technology stocks, including semiconductors, led the gains. Microsoft (MS) rose 1.7% on sales expectations related to its Blizzard acquisition. Nvidia increased 2.39%, supported by investment firms' analyses predicting a surge in AI industry sales. Alphabet, Google's parent company, reported better-than-expected revenue and net income in its after-hours earnings release, causing its shares to rise more than 6% in after-hours trading.

Meanwhile, the results of the July FOMC regular meeting, which determines the U.S. benchmark interest rate, are scheduled to be announced the following day. The market widely expects a 0.25 percentage point rate hike. The key issue is whether there will be additional rate increases within the year, and attention is focused on the Federal Reserve's stance on this matter.

The KOSPI is expected to start flat today. Seo Sang-young, head of the Media Content Division at Mirae Asset Securities, said, "The U.S. stock market showed strength centered on semiconductors and technology stocks after initial mixed flat trading, driven by growing confidence in the economy, which is expected to have a positive impact on the Korean stock market. However, the supply and demand phenomenon limited to certain sectors and themes could increase index volatility, which is a concern." He added, "After a flat start, volatility is expected to increase depending on whether the concentration phenomenon eases and the resulting foreign investor supply and demand trends."