[Good Morning Stock Market] "Big Tech Optimism Presses Down PCE Concerns... KOSPI Expected to Start Higher"

Alphabet surges 10%... Earnings Surprise
MS, Nvidia, Step, and others surge
PCE rises 2.7% year-over-year

[Image source=Yonhap News]

The KOSPI is expected to start higher on the 29th. Optimism over the earnings of big tech companies such as Alphabet and Microsoft (MS) outweighed concerns about the U.S. March Personal Consumption Expenditures (PCE). As a result, the S&P 500 and Nasdaq closed higher.

On the 26th (local time), the Dow Jones Industrial Average closed at 38,239.66, up 153.86 points (0.40%) from the previous session. The S&P 500 rose 51.54 points (1.02%) to 5,099.96, and the tech-heavy Nasdaq index gained 316.14 points (2.03%) to close at 15,927.90.

The S&P 500 rose 2.7% this week, breaking a three-week losing streak. The Nasdaq increased 4.2% this week, marking its highest weekly gain since November last year.

The U.S. stock market was driven by optimism over big tech earnings. Alphabet closed up 10% from the previous trading day following quarterly results that exceeded market expectations, its first-ever cash dividend, and a $70 billion share buyback announcement. This was the largest single-day gain since July 2015.

MS also rose 1.8%, supported by continued momentum in its cloud business. Snap surged 27%, and Skechers jumped 11% after reporting earnings that beat market expectations. Notably, Nvidia gained nearly 10% over two days, benefiting from increased investments in artificial intelligence (AI) chips by major tech companies.

However, inflation concerns persist. The U.S. March PCE price index matched market expectations with a 0.3% increase month-over-month but rose 2.7% year-over-year. The core PCE price index, excluding energy and food, increased 2.8% year-over-year and 0.3% month-over-month. While the month-over-month increase met expert forecasts, the year-over-year rise exceeded expectations by 0.1 percentage points.

Kim Seok-hwan, a researcher at Mirae Asset Securities, said, "On the 29th, the domestic stock market is expected to benefit from the upward rally led by U.S. big tech companies," adding, "Expectations for a rebound buying in semiconductors will also remain valid."