[Good Morning Stock Market] "NVIDIA Shock... Increased Foreign Profit-Taking Pressure Centered on Semiconductors"

As the three major indices of the U.S. New York stock market recorded a decline centered on technology stocks, securities firms predicted on the 29th that foreign investors' profit-taking pressure on semiconductor stocks would increase in the domestic stock market.

[Image source=Reuters Yonhap News]

On the 28th (local time) in the New York stock market, the Dow Jones Industrial Average, centered on blue-chip stocks, closed at 41,091.42, down 159.08 points (0.39%) from the previous trading day. The S&P 500 index, focused on large-cap stocks, fell 33.62 points (0.6%) to 5,592.18, and the technology-heavy Nasdaq index closed down 198.79 points (1.12%) at 17,556.03.

Looking at individual stocks, technology stocks were weak. In particular, Nvidia, the "leader in artificial intelligence (AI) semiconductors," fell 2.1% during regular trading. After the market closed, Nvidia announced second-quarter revenue of $30.04 billion (40.1785 trillion KRW) and earnings per share of $0.68 (909 KRW), surpassing market expectations, but its after-hours trading dropped about 7%, continuing the decline. Kim Ji-won and Lim Jeong-eun, researchers at KB Securities, said, "Despite Nvidia's earnings exceeding forecasts, the market's high expectations led to disappointment, resulting in weakness in after-hours trading."

Amazon fell 1.34%, while Alphabet, Google's parent company, and Microsoft (MS) dropped 1.13% and 0.78%, respectively. Super Micro Computer, a beneficiary of AI, plummeted 19.02%. This followed a short-selling report by Hindenburg Research the previous day and the announcement that the annual accounting report submission would be delayed. Despite Bank of America (BoA) announcing that Warren Buffett's Berkshire Hathaway sold an additional $981.9 million worth of shares, it rose 0.71%, becoming the first company outside of technology stocks to reach a market capitalization of $1 trillion.

The Morgan Stanley Capital International (MSCI) Korea Index Exchange-Traded Fund (ETF) fell 1.0%, and the MSCI Emerging Markets Index ETF dropped 0.6%. Eurex KOSPI 200 futures closed down 0.8%.

Kim Seok-hwan, a researcher at Mirae Asset Securities, said, "Concerns about weakening momentum are expected to spread. Nvidia's earnings were a 'surprise,' but the market's reaction was at a 'shock' level. This will increase foreign investors' profit-taking pressure on the semiconductor sector, which has been sluggish recently."

Researchers Kim Ji-won and Lim Jeong-eun also said, "It is inevitable that selling pressure centered on semiconductor stocks will emerge domestically as well. We need to calmly monitor foreign investor flows and respond accordingly." They added, "Attention will shift to the U.S. July Personal Consumption Expenditures (PCE) data to be released on the 30th. The second-quarter Gross Domestic Product (GDP) and weekly unemployment insurance claims results released that day are also important."

Meanwhile, the one-month Non-Deliverable Forward (NDF) won-dollar exchange rate in New York was 1,334 won, and the won-dollar exchange rate is expected to start down 4 won on the day.