[Good Morning Stock Market] US Stocks Fall on Semiconductor Shock... "KOSPI Attempts to Break 2700 Level"

NVIDIA Leading Rally Plunges 5.5%... Semiconductor Stocks Fall Sharply
Focus on This Week's Events: February CPI Release, March FOMC
"Despite US Semiconductor Plunge Shock, KOSPI to Attempt Breakthrough Above 2700"

On the 11th, the KOSPI is expected to attempt to break through the 2700 level.

[Image source=Reuters Yonhap News]

On the 8th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 38,722.69, down 68.66 points (0.18%) from the previous session. The S&P 500 index fell 33.67 points (0.65%) to 5,123.69, and the Nasdaq index closed at 16,085.11, down 188.27 points (1.16%) from the previous session.

The employment data released ahead of the opening showed mixed signals. Nonfarm payrolls in February increased by 275,000, exceeding the previous estimate of 198,000. However, the unemployment rate for February was 3.9%, higher than the market consensus (average forecast) of 3.7%. This is the highest unemployment rate since January 2022, when it was 4.0%. Although employment increased, the rise in the unemployment rate caused investors to struggle with interpreting the data.

On that day, the U.S. stock market saw the S&P 500 and Nasdaq indices hit intraday all-time highs but closed lower as profit-taking selling surged. Nvidia, which had led the recent rally, plunged 5.55%, marking its largest daily drop since May last year. Sam Stovall, Chief Investment Strategist at CFRA Research, said, "(Nvidia's decline) does not mean the long-term upside potential is over," adding, "However, we are in an overbought zone, and it is time to take some profits." Not only Nvidia but also major semiconductor stocks such as Intel (-4.66%), AMD (-1.89%), and Micron Technology (-1.37%) all declined. Among the 'Magnificent 7' (Apple, Amazon, Alphabet, Microsoft, Meta, Nvidia, Tesla), Microsoft (MS, -0.71%), Meta (-1.22%), Amazon (-0.83%), and Tesla (-1.85%) fell, while Apple (1.02%) and Google Alphabet (0.78%) closed higher.

Jinhyuk Kang and Jaewon Lee, researchers at Shinhan Investment Corp., said, "With the March Federal Open Market Committee (FOMC) meeting scheduled for March 20 and the February Consumer Price Index (CPI) release set for March 12, market volatility may increase."

Last week, the KOSPI closed at 2,680.35, up 32.73 points (1.24%). Semiconductor stocks showed strength due to dovish remarks from Jerome Powell, Chair of the U.S. Federal Reserve (Fed), suggesting that the timing of interest rate cuts is near, as well as expectations for growth in artificial intelligence (AI).

Kyungmin Lee, a researcher at Daishin Securities, said, "Despite the sharp decline in U.S. semiconductor stocks, we still see a high possibility of the KOSPI attempting to break through the 2700 level." He added, "Not only semiconductors but also sectors expected to strengthen shareholder return policies ahead of the shareholder meeting season, such as banks, trading companies, capital goods, and insurance, are showing strength, indicating that there are sectors that will lead the KOSPI's additional rebound attempts." He further noted, "There is a high likelihood of continued rotation among suppressed growth stocks and export stocks. In particular, we focus on semiconductors, pharmaceuticals and bio sectors, and secondary batteries, which have favorable earnings outlooks and solid foreign demand."