[Good Morning Market] US Stocks Rise Together... "KOSPI Focuses on Semiconductors and China-Related Stocks"

Dow and S&P 500 Hit Record Highs Despite 'Employment Uncertainty' Indicator
NVIDIA-Led Semiconductor Sector Shows Strong Gains
Favorable Environment for Domestic Semiconductor Stocks... China-Related Stock Supply Also a Key Point

The U.S. New York stock market closed higher across the board. Despite indicators raising concerns about the employment market, the market showed an upward trend fueled by China's economic stimulus measures, expectations of interest rate cuts by the U.S. Federal Reserve (Fed), and the strength of Nvidia. The domestic stock market is expected to see a favorable breeze centered on semiconductor stocks.

[Image source=Reuters Yonhap News]

On the 24th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 42,208.22, up 83.57 points (0.2%) from the previous session. The S&P 500 index rose 14.36 points (0.25%) to 5,732.93, and the Nasdaq index closed at 18,074.52, up 100.25 points (0.56%) from the previous session. Both the Dow and S&P 500 set new all-time closing highs once again.

During the day, the market showed strength on news of China's large-scale economic stimulus package, which included a 0.5 percentage point cut in the reserve requirement ratio, but buying momentum weakened following news that the Conference Board (CB), a U.S. economic research organization, reported the largest drop in consumer confidence in three years. CB's September consumer confidence index was 98.7, below the expected 104 and the previous month's 105.6. Notably, concerns about employment increased. The expectations index, which reflects short-term outlooks for the employment market, fell from 86.3 last month to 81.7. After the CB announcement, the index briefly turned negative during the session but then rebounded to close slightly higher.

Looking at individual stocks, Nvidia led the index gains, rising 3.96% to surpass the $120 mark. The completion of CEO Jensen Huang's share sale appears to have stimulated investor sentiment. TSMC also rose 4.13%, and the semiconductor sector overall showed strong performance. The Philadelphia Semiconductor Index closed up 1.31%. Among other major stocks, Microsoft (-1.00%) and Meta (-0.19%) declined, while Apple (0.40%), Alphabet (0.27%), Amazon (0.04%), and Tesla (1.71%) rose. Chinese stocks listed on the New York Stock Exchange were generally strong. Alibaba surged 7.91%, PDD, the parent company of Temu, jumped 11.24%, and JD.com rose 13.91%. Baidu, the largest search engine, increased by 7.39%.

For the time being, market attention is expected to focus on the stability of the employment market. Dana Peterson, CB's chief economist, said, "All components of the index showed a deterioration in consumer sentiment," adding, "This reflects consumers' concerns about employment market conditions." One of the reasons the Fed recently implemented a 'big cut' (a rate cut larger than 0.25 percentage points) was the slowdown in the employment market.

The previous day, the KOSPI closed at 2,631.68, up 29.67 points (1.14%) from the previous trading day. Amid external favorable factors such as Tesla's strength and the sharp rise in the Chinese stock market, buying momentum flowed in on expectations for the launch of the 'Value-Up Index.' Kiwoom Securities researchers Han Ji-young and Lee Seong-hoon said, "Today, despite weak U.S. consumer sentiment indicators, the KOSPI is expected to show an upward trend supported by new highs in the Dow and S&P 500 and expectations for China's economic stimulus. From an industry perspective, the strength of the Philadelphia Semiconductor Index, including Nvidia, is expected to create a favorable environment for domestic semiconductor stocks, but anticipation of Micron's earnings (scheduled for the 26th) may limit their price upside."

The two researchers also noted, "The supply and demand for China-related cyclical stocks, which have been neglected in the domestic market for some time, will also be a point to watch." They predicted that market interest will focus on seeking supply and benefits, especially among small and mid-cap stocks included in the 'Value-Up Index' launched by the exchange the previous day.