[Good Morning Stock Market] Concerns Over Additional US Tightening... KOSPI Expected to Start Flat

Last week, the US stock market rose due to a rebound buying from oversold conditions but gave back gains amid rising Treasury yields and closed with a slight gain. The KOSPI is expected to start flat on the 11th.

On the 8th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 34,576.59, up 75.86 points (0.22%) from the previous trading day. The Standard & Poor's (S&P) 500 index rose 6.35 points (0.14%) to 4,457.49, and the Nasdaq index closed at 13,761.53, up 12.69 points (0.09%).

On a weekly basis, the Dow fell 0.75%, while the S&P 500 and Nasdaq also declined by 1.29% and 1.93%, respectively, showing a bearish trend. It was the first decline in three weeks for both the S&P 500 and Nasdaq.

Recent strong US economic indicators have raised concerns that the Federal Reserve (Fed) may continue its rate hike stance longer than expected, putting downward pressure on stock prices. However, market experts still expect with over 90% probability that the Fed will keep rates unchanged at the Federal Open Market Committee (FOMC) meeting scheduled for the 19th-20th. The November meeting outlook is different, with a 54% chance of a rate hold and a 47% chance of a rate hike of 0.25 percentage points or more.

Apple, which had been weak due to US-China tensions, saw rebound buying with an intraday gain of 1.5%, but volatility was observed as it turned down amid rising Treasury yields and a stronger dollar, closing slightly up by 0.35%. Qualcomm (-0.24%) also closed slightly down.

On this day, the domestic stock market is expected to start flat and continue with a stock-specific market. Seosangyoung, Head of Media Content at Mirae Asset Securities, said, "The US stock market giving back gains due to the impact of a strong dollar and rising interest rates is a burden on the Korean stock market. Although major US indices showed slight gains, indices with significant influence on the Korean market, such as the Philadelphia Semiconductor Index down 0.45% and the Russell 2000 down 0.23%, underperformed." He added, "With the upcoming US and China real economy indicators expected to slow down and the US Consumer Price Index expected to rise for the second consecutive month, a wait-and-see stance will continue. The Korean stock market is expected to start flat, but ahead of major US-China economic data releases, a stock-specific market rather than active responses is anticipated."