[Good Morning Stock Market] US Stock Market Ends Mixed... KOSPI Expected to Start Higher

As the U.S. stock market closed mixed ahead of remarks from Federal Reserve Chairman Jerome Powell and other key officials, the KOSPI is expected to start higher on the 9th.

[Image source=Yonhap News]

On the 8th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 34,112.27, down 40.33 points (0.12%) from the previous session. The large-cap S&P 500 index rose 4.40 points (0.10%) to 4,382.78, while the tech-heavy Nasdaq index gained 10.56 points (0.08%) to close at 13,650.41.

The U.S. stock market ended mixed amid profit-taking following a recent sharp rebound and cautious sentiment ahead of remarks from key Federal Reserve officials. The S&P and Nasdaq indices experienced their longest rally in over two years, but gains were limited compared to last week. Additionally, a sharp decline in Treasury yields last week brought an end to a short-term supply-demand event that triggered record short covering (buying back short-sold stocks) across major asset classes including stocks and bonds.

Among the 11 sectors of the S&P 500, five sectors including IT (0.64%) and real estate (0.58%) rose. Notably, IT has risen for nine consecutive trading days since May 27, gaining about 10%. Conversely, six sectors including energy and utilities fell by 1.22% and 0.73%, respectively. With about 88% of S&P 500 companies having reported earnings, the third-quarter earnings season is nearing its end. Of these, approximately 82% of companies reported profits exceeding market expectations. Kyndryl Holdings (13.56%) and Roblox (11.96%) rose after reporting better-than-expected earnings.

International oil prices continued to weaken amid growing concerns over demand slowdown. They have fallen nearly 7% over the past two days. This marks the fourth such decline since March, May, and early last month amid spreading demand concerns. Although production cuts by major oil producers including Saudi Arabia and Russia and geopolitical tensions in the Middle East exerted upward pressure, the market has recently focused more on demand weakness.

The Morgan Stanley Capital International (MSCI) Korea Index Exchange-Traded Fund (ETF) and MSCI Emerging Markets Index ETF fell 1.82% and 0.66%, respectively. Eurex KOSPI 200 futures rose 0.28%. Accordingly, the KOSPI is expected to open up about 0.2% to 0.5% higher.

Kim Seok-hwan, a researcher at Mirae Asset Securities, said, "As the third-quarter earnings season nears its end, the increasing concerns among companies are causing the stock market’s direction to fluctuate. The demand weakness due to global economic slowdown fears and rising costs from various expenses are weighing on corporate earnings."

He added, "In fact, the sales and operating profit forecasts for domestic listed companies this year are expected to decrease by 30% and 22%, respectively, compared to last year. While next year is expected to improve somewhat, both sales and operating profit estimates have been revised downward by about 6% since the beginning of the year."