Overnight, the U.S. stock market largely remained on the sidelines, with some semiconductor sectors showing strength, resulting in a mixed close. On the 1st, the KOSPI is expected to start slightly lower.
On the previous day (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 34,721.91, down 168.33 points (0.48%) from the previous trading day. The Standard & Poor's (S&P) 500 index fell 7.21 points (0.16%) to 4,507.66, while the Nasdaq index rose 15.66 points (0.11%) to close at 14,034.97.
The Dow and S&P 500, which had risen for four consecutive trading days, declined for the first time in five sessions, whereas the Nasdaq rose for the fifth consecutive trading day.
The U.S. stock market had been on an upward trend amid growing expectations of a 'rate pause' by the Federal Reserve (Fed) ahead of this month's scheduled Federal Open Market Committee (FOMC) meeting. However, the July core PCE price index released that day rose 4.2% compared to the same period last year, meeting market expectations but increasing from the previous month’s 4.1%. Given the continued strong inflationary pressures, attention is increasingly focused on the Fed's decision.
Additionally, investors are expected to remain cautious, closely watching the upcoming U.S. employment report. Recent private sector employment data released by ADP fell short of expectations, reinforcing forecasts that employment is slowing faster than anticipated.
Meanwhile, some semiconductor stocks such as Broadcom and Micron showed strength. Broadcom closed up 3.43%, buoyed by analyses suggesting that AI-focused chip production is accelerating and that its quarterly earnings, to be announced after market close, will significantly exceed expectations. Micron also rose 2.72%.
The KOSPI is expected to start down around 0.3% on the day. Seosangyoung, Head of Media Content at Mirae Asset Securities, said, "Considering that the U.S. stock market continued a stock-specific issue-driven trading session ahead of the employment report release, the Korean stock market is also expected to show differentiated movements by individual stocks. While the robustness of U.S. consumption is favorable, the recent increase in credit card delinquency rates suggests a decline in consumption continuity, and the shift to rising inflation rates is a burden." He added, "The Philadelphia Semiconductor Index’s 0.74% gain on expectations for the semiconductor sector is positive. The Korean stock market is expected to start down around 0.4%, but will likely show a mixed pattern ahead of the U.S. employment report release."
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