[Good Morning Stock Market] US Stock Market Declines... Domestic Market Faces 'Downside Risk Warning'

The three major U.S. stock indices all closed lower. The domestic stock market is expected to be cautious of the risk of decline influenced by the U.S. stock market.

[Image source=UPI Yonhap News]

On the 22nd (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average fell 177.71 points (0.43%) from the previous trading day to close at 40,712.78. The large-cap focused S&P 500 index dropped 50.21 points (0.89%) to 5,570.64, and the tech-heavy Nasdaq index closed down 299.64 points (1.67%) at 17,619.35.

Last night, the U.S. stock market declined amid caution ahead of Federal Reserve Chairman Jerome Powell's remarks at the Jackson Hole meeting. In particular, major companies such as Nvidia (-3.70%), Microsoft (-2.03%), and Tesla (-5.65%) showed weakness, causing the IT and consumer discretionary sectors to fall by around 2%.

Snowflake (-15%) plunged despite reporting earnings that exceeded Wall Street estimates, due to a negative outlook on third-quarter fiscal year revenue. Along with Snowflake, poor performances by Intel (-6.1%) and Wolfspeed (-5.0%) affected overall investor sentiment in the semiconductor sector, leading the Philadelphia Semiconductor Index and the VanEck Semiconductor Exchange-Traded Fund (ETF) to drop more than 3%.

The Morgan Stanley Capital International (MSCI) Korea Index ETF fell 1.9%, and the Emerging Markets Index ETF declined 1.2%. Eurex KOSPI 200 futures dropped 1.0%.

The domestic stock market is expected to be influenced by the decline in the U.S. stock market. Kim Seok-hwan, a researcher at Mirae Asset Securities, said, "There has been no significant inflow of foreign investors' cash recently, so the upward momentum has slowed," adding, "The KOSPI is likely to continue limited fluctuations around the 2700 level." He also advised, "Caution is needed regarding the risk of decline due to Chairman Powell's remarks at the Jackson Hole meeting and the influence of the U.S. stock market."

Lee Kyung-min, a researcher at Daishin Securities, predicted, "The market reaction to Chairman Powell's speech will affect the sensitivity of economic indicators to be announced next week." He added, "Chairman Powell is likely to express confidence that the U.S. economy remains robust and that monetary policy can sufficiently control the economic slowdown. If the market responds positively, stock market stability may continue."

On the same day, the one-month non-deliverable forward (NDF) USD/KRW exchange rate was at 1,340 won, and the spot USD/KRW exchange rate is expected to start 5 won lower reflecting this.