[Good Morning Market] US Stocks Fall on Economic Slowdown Concerns... KOSPI Expected to Open Lower

Overnight, the U.S. stock market closed lower amid growing concerns about an economic slowdown. On the 7th, the KOSPI index is also expected to start slightly down.

On the previous day (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 36,054.43, down 70.13 points (0.19%) from the previous session. The Standard & Poor's (S&P) 500 index fell 17.84 points (0.39%) to 4,549.34, and the Nasdaq index dropped 83.20 points (0.58%) to 14,146.71. Both the Dow and S&P 500 have declined for three consecutive trading days. While the three major indexes showed nearly a 10% rise last month, they have been sluggish since the beginning of this month.

[Image source=Yonhap News]

The weakness in the U.S. stock market is attributed to concerns over an economic slowdown. Private employment data released by Automatic Data Processing (ADP) showed that private sector employment fell short of expectations, indicating a rapid slowdown in the job market. According to the ADP National Employment Report, private sector employment increased by only 103,000 in November compared to the previous month. This figure was below the expert forecast of 128,000 compiled by The Wall Street Journal (WSJ).

Investors are taking a wait-and-see approach ahead of the U.S. Labor Department's employment report scheduled for release on the 8th. Market experts expect the nonfarm payroll increase for November to rise to 190,000, up from 150,000 in the previous month. The slowdown in wage growth, along with a decrease in job postings and new jobs, is interpreted as the labor market responding to the Federal Reserve's interest rate hikes.

The decline in international oil prices has also fueled concerns about a global economic slowdown. West Texas Intermediate (WTI) crude oil prices have fallen for five consecutive trading days, dropping below $70 per barrel. This is the lowest level in the past five months.

Looking at sector performance, among the 11 sectors within the S&P 500 index, eight sectors declined, except for utilities, industrials, and healthcare. In particular, energy stocks fell more than 1% due to the drop in oil prices.

On this day, the Korean stock market indicators are expected to start slightly lower. Kim Seok-hwan, a researcher at Mirae Asset Securities, said, "The U.S. stock market initially rose on data that could strengthen the narrative for interest rate cuts but closed lower as concerns about an economic slowdown continued to build. The KOSPI is expected to start down by 0.2 to 0.4%."