[Good Morning Stock Market] US Stocks Close Mixed... KOSPI Expected to Start Slightly Lower

Overnight, the U.S. stock market closed mixed as concerns about an economic recession mingled despite news of slowing inflation indicators. The domestic stock market on the 1st 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 35,950.89, up 520.47 points (1.47%) from the previous session. The S&P 500 index rose 17.22 points (0.38%) to 4,567.80, while the Nasdaq index fell 32.27 points (0.23%) to 14,226.22. The Dow reached its highest level since January last year, and the S&P 500 hit its highest since early August. The Nasdaq index declined for the second consecutive day.

During November, the Dow rose 8.8%, marking its largest monthly gain since October last year. The S&P 500 and Nasdaq also posted their biggest increases since July last year, rising 8.9% and 10.7%, respectively.

Within the S&P 500, healthcare, industrial, and financial stocks rose more than 1%, while telecommunications, consumer discretionary, and technology stocks declined. Salesforce surged 9.36% after reporting earnings that exceeded market expectations. Conversely, big tech companies such as Nvidia (-2.85%), Alphabet (-2.66%), Meta Platforms (-1.88%), and Tesla (-1.78%) weakened due to profit-taking.

The U.S. core Personal Consumption Expenditures (PCE) price index for October rose 3.5% compared to the same period last year, in line with market expectations. This represents a slowdown from the previous month’s 3.7% increase. As the inflation slowdown trend becomes clearer, confidence is growing that the Federal Reserve (Fed) will not raise interest rates further this year.

Jerome Powell, Chairman of the U.S. Federal Reserve (Fed) [Image source=Yonhap News]

However, interpretations differ on whether the recent inflation slowdown is sufficient to satisfy the Fed. According to the Chicago Mercantile Exchange (CME) FedWatch, the federal funds (FF) futures market shows a 46.6% probability that the Fed will cut rates at the March meeting next year, and a 51.1% chance of holding rates steady. For the May meeting next year, the probability of a rate cut rises to 78%, with a 21.1% chance of maintaining current rates.

Investors are closely watching the discussion scheduled for the 1st with Fed Chair Jerome Powell. Powell will participate in a conversation and a panel discussion at Spellman College in Atlanta at 11 a.m. and 2 p.m., respectively.

The KOSPI index is expected to start down 0.3?0.5% on the day. Kim Seok-hwan, a researcher at Mirae Asset Securities, said, "The domestic stock market rose an average of 11% in November, marking the largest monthly gain since December 2020." He added, "Foreign investors concentrated 84% of their net buying amount, 3.5 trillion won, solely on semiconductors, increasing their net purchases since the beginning of the year to 18.6 trillion won." He continued, "The Bank of Korea forecasted a 2.3% economic growth rate next year, expecting that if the global economy, including semiconductors, rebounds rapidly, exports and investment recovery will strengthen." He also noted, "Exports for November, to be announced today, are expected to increase 5% year-on-year, driven by semiconductor export growth, marking two consecutive months of improvement."