[Good Morning Stock Market] US Stocks Also 'Plummet'... KOSPI Expected to Start Lower

Overnight, the U.S. stock market closed lower as concerns over corporate earnings grew despite a stronger-than-expected third-quarter gross domestic product (GDP) growth rate. The KOSPI is also expected to start lower on the 27th.

On the previous day (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 32,784.30, down 251.63 points (0.76%) from the previous session. The Standard & Poor's (S&P) 500 index fell 49.54 points (1.18%) to 4,137.23, and the Nasdaq index dropped 225.62 points (1.76%) to 12,595.61.

Although the U.S. third-quarter GDP growth rate came in stronger than expected at 4.9%, economic indicators showed strength, but it was insufficient to reverse the deteriorated investor sentiment caused by recent rises in Treasury yields and geopolitical instability in the Middle East. In fact, the robust U.S. economic growth is interpreted as a factor that could justify the Federal Reserve's prolonged tightening, which worsened investor sentiment.

[Image source=Yonhap News]

As major companies continue to report their third-quarter earnings, results have been mixed. Meta, which reported earnings after the market closed the previous day, posted results that exceeded market expectations, but its stock price fell 3.73%. This was due to concerns that the advertising market could shrink because of geopolitical conflicts in the Middle East. Toy company Mattel’s stock dropped more than 7% despite quarterly earnings beating expectations, as it warned of weakening demand during the year-end shopping season.

In contrast, IBM’s stock rose more than 4% after reporting better-than-expected strong earnings. Stocks of small and regional banks such as First Citizens (8.67%), Eagle Bancorp (13.35%), and CVB Financial (7.28%), which continue to see deposit growth, rose, leading to an overall improvement in investor sentiment.

The domestic stock market is expected to start the day down about 0.3% to 0.6%. Kim Seok-hwan, a researcher at Mirae Asset Securities, said, "It is difficult to find favorable aspects in the domestic stock market after repeated recent declines," adding, "It seems advisable to approach by dividing time and price now."