[Good Morning Stock Market] Nvidia's 'Surprise Earnings'... Domestic Stock Market Expected to Start Higher

On the 22nd, the domestic stock market is expected to start higher due to Nvidia's surprise earnings. Nvidia's earnings significantly exceeded market expectations, showing gains in after-hours trading, which is expected to lead to a concurrent rise in related stocks.

[Image source=Yonhap News]

The three major U.S. stock indices closed mixed on the 21st (local time). On that day, at the New York Stock Exchange (NYSE), the blue-chip-focused Dow Jones Industrial Average rose 48.44 points (0.13%) from the previous session to close at 38,612.24. The large-cap-focused S&P 500 index closed up 6.29 points (0.13%) at 4,981.8. Both the Dow and S&P 500 declined during the day but managed to rebound just before the close. The tech-heavy Nasdaq index fell 49.91 points (0.32%) to 15,580.87, marking its third consecutive day of decline.

Hwang Junho, a researcher at Sangsangin Securities, explained, "With the Federal Open Market Committee (FOMC) minutes released showing cautious Federal Reserve (Fed) officials regarding interest rate cuts, and ahead of Nvidia's earnings announcement after the market close, profit-taking sentiment was reflected, resulting in a mixed performance in the New York stock market."

Park Kwangnam, a researcher at Mirae Asset Securities, said, "Ultimately, market attention is focused on Nvidia's earnings announcement after the market close, and the market's evaluation of Nvidia's results suggests that changes in the stock market will follow."

The recently released January FOMC minutes reaffirmed Fed officials' cautious stance on early interest rate cuts. The minutes stated, "Most participants noted that moving too quickly to ease monetary policy would be risky," and emphasized, "It is important to carefully evaluate incoming data to determine whether inflation is sustainably declining to 2%."

Researcher Park analyzed, "Although there was caution regarding upside risks to inflation, the overall inflation trend is expected to be maintained, and since this has already been communicated to the market through Fed officials' remarks, the impact is limited. Regarding balance sheet reduction, the minutes suggest that there will be discussions about the pace of reduction at the next meeting."

The domestic stock market, which has been fluctuating due to a momentum gap, is expected to start higher influenced by Nvidia's surprise earnings. Nvidia's earnings significantly exceeded market expectations, showing gains in after-hours trading, which is expected to lead to a concurrent rise in related stocks.

Nvidia announced after the market close that its fourth-quarter earnings last year exceeded market expectations. Nvidia reported fourth-quarter revenue of $22.1 billion (29.5035 trillion KRW) and earnings per share of $5.15 (6,875 KRW). Revenue increased 265% compared to the same period a year earlier, and gross profit surged 769% to $12.29 billion.

Kim Ji-won, a researcher at KB Securities, said, "Positive trends are expected for domestic artificial intelligence (AI)-related stocks and the electrical and electronics sectors. Attention should be paid to changes in foreign investor flows, which have been showing a short-term pause. With the Bank of Korea's Monetary Policy Committee expected to maintain rates, and inflation uncertainty factors present, a conservative stance is anticipated."