[Good Morning Market] US Stock Market Mixed Amid Inflation Slowdown, KOSPI Foreign Investor Flows 'In Focus'

The U.S. stock market closed mixed amid slowing inflation. The domestic stock market is expected to focus on foreign demand and supply in the semiconductor sector.

[Image source=Reuters Yonhap News]

On the 11th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average rose 32.39 points (0.08%) from the previous trading day to close at 39,753.75. The S&P 500 index, centered on large-cap stocks, fell 49.37 points (0.88%) to 5,584.54, and the tech-heavy Nasdaq index closed down 364.04 points (1.95%) at 18,283.41.

Last night, the U.S. stock market closed mixed as investor sentiment diverged by index. Large-cap companies in the IT, communication services, and consumer discretionary sectors declined, while the small- and mid-cap Russell 2000 surged 3.6%, marking its highest increase since mid-November last year.

Meanwhile, last month’s Consumer Price Index (CPI) fell by 0.1 percentage points compared to the previous month. As a result, the market raised the probability of a rate cut in September from 70% to 85%, an increase of about 15 percentage points, and major investment bank JP Morgan advanced its forecast for a rate cut from November to September.

Seokhwan Kim, a researcher at Mirae Asset Securities, explained, "The differentiated movement between large-cap and small-cap stocks occurred because the CPI fell short of market expectations, raising hopes for a Federal Reserve (Fed) rate cut in September."

Among individual stocks, Tesla fell 8.4% due to concerns that the upcoming Robotaxi Day event scheduled for next month might be postponed to October and profit-taking pressure following its recent sharp rise. Additionally, selling pressure was significant on large tech stocks that led the market rally, such as Nvidia (-5.4%), Meta (-4.1%), Apple (-2.3%), and semiconductor stocks including Micron (-4.5%), Qualcomm (-4.3%), and Lam Research (-6.0%).

The Morgan Stanley Capital International (MSCI) Korea Index Exchange-Traded Fund (ETF) rose 0.1%, and the Emerging Markets Index ETF increased by 0.6%. Eurex KOSPI 200 futures fell 0.9%.

In the domestic stock market, there is analysis that profit-taking may occur in the semiconductor sector. Researcher Kim noted, "The progress in U.S. disinflation (slowing inflation rate) is welcome news, but the deterioration of investor sentiment due to weakness in large tech stocks is unwelcome. In particular, the concentrated profit-taking in semiconductors in the U.S. market could increase selling pressure from foreign investors."

Jiyoung Han, a researcher at Kiwoom Securities, said, "There is a high possibility of selling pressure on large-cap stocks due to recent short-term sharp rises and new highs. As the index’s upward momentum slows, demand will be dispersed to stocks with strong earnings."

On this day, the one-month Non-Deliverable Forward (NDF) won-dollar exchange rate in New York was 1,370 won, and reflecting this, the won-dollar exchange rate is expected to start down 4 won.