[Good Morning Stock Market] US Tech Stocks Rise... Domestic Market Shows 'Risk Aversion Dominance'

The U.S. stock market closed higher due to bargain buying centered on technology stocks. The domestic stock market is expected to be dominated by risk-averse sentiment ahead of the release of key inflation indices.

[Image source=Reuters Yonhap News]

On the 10th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average fell 92.63 points (0.23%) from the previous trading day to close at 40,736.96. The large-cap-focused S&P 500 index rose 24.47 points (0.45%) to 5,495.52, and the tech-heavy Nasdaq index closed up 141.28 points (0.84%) at 17,025.88.

Last night, the U.S. stock market closed with a significant recovery from intraday lows, supported by gains in major technology stocks. Microsoft and Amazon rose more than 2%, Tesla increased by 4.58%, and Nvidia gained 1.53%. Oracle surged 11.44% after reporting earnings that exceeded expectations and raising its earnings outlook.

However, the energy sector fell 1.9% due to the decline in international oil prices. At the New York Mercantile Exchange, the near-month October delivery West Texas Intermediate (WTI) crude oil closed at $65.75 per barrel, down $2.96 (4.31%) from the previous trading day. This is the lowest level since December 2021.

The financial sector (-1.0%) also showed weakness amid expectations that net interest income will decrease due to the Federal Reserve's interest rate cut cycle.

The Morgan Stanley Capital International (MSCI) Korea Index Exchange-Traded Fund (ETF) fell 0.6%, and the Emerging Markets Index ETF dropped 0.4%. Eurex KOSPI 200 futures rose 0.1%.

Seokhwan Kim, a researcher at Mirae Asset Securities, said about the domestic market, "The 20-year government bond yield recently dropped more than 12 basis points (1bp = 0.01 percentage points), approaching the March 2022 low level," adding, "There is a stronger tendency to avoid risk assets rather than prefer them." He also noted, "Attention should be paid to the upcoming U.S. presidential debate and the Consumer Price Index (CPI) release."

Junho Byun, a researcher at IBK Investment & Securities, said, "Currently, the stock market is experiencing a short-term rebound environment following last week's sharp decline," but added, "However, the major risk of economic downturn may persist, and short-term variables that require attention also remain." He advised, "If the stock market rebounds, it would be advantageous to take a short-term approach with a light hand."

On the same day, the one-month non-deliverable forward (NDF) USD/KRW exchange rate was 1,341 won, and reflecting this, the USD/KRW exchange rate is expected to start down 4 won.