[Good Morning Market] US Major Indexes Fall... "Domestic Market Focuses on Samsung Electronics' Preliminary Earnings"

As major U.S. indices closed lower, the domestic stock market on the 8th is expected to be influenced by Samsung Electronics' preliminary earnings announcement, which will be released before the market opens.

[Image source=Reuters Yonhap News]

On the 7th (local time) in the New York stock market, the Dow Jones Industrial Average, centered on blue-chip stocks, closed at 41,954.24, down 398.51 points (0.94%) from the previous trading day. The S&P 500 index, focused on large-cap stocks, fell 55.13 points (0.96%) to 5,695.94, and the Nasdaq index, centered on technology stocks, dropped 213.95 points (1.18%) to close at 17,923.9.

Investor sentiment shrank amid a sharp rise in Treasury yields. Kim Seok-hwan, a researcher at Mirae Asset Securities, said, "The U.S. 10-year Treasury yield exceeded 4% for the first time since last August, and tensions in the Middle East increased, pushing oil prices above $80 per barrel. The employment data released earlier this month showed better-than-expected results, raising expectations that the Federal Reserve (Fed) will not rush to cut interest rates."

According to the Chicago Mercantile Exchange (CME) FedWatch, the federal funds futures market lowered the probability of the Fed cutting rates by 0.5 percentage points at the November Federal Open Market Committee (FOMC) meeting from 34.7% a week ago to 0% on this day. The probability of a 0.25 percentage point rate cut rose from 65.3% to 84%, and the probability of maintaining rates increased from 0% to 16% during the same period.

Accordingly, major U.S. big tech companies Apple and Amazon fell by 2.25% and 3.06%, respectively. Jefferies downgraded Apple’s investment rating from 'buy' to 'hold,' citing overly high expectations for the iPhone 16 and iPhone 17. Wells Fargo lowered Amazon’s rating from 'overweight' to 'equal weight,' citing growth slowdown and competition with Walmart. Nvidia, a leader in AI chips, rose 2.24%, reclaiming its position as the second-largest market capitalization. Pfizer rose 2.17% after activist investor Starboard Value acquired a $1 billion stake to push for company restructuring.

Han Ji-young and Lee Seong-hoon, researchers at Kiwoom Securities, said, "The domestic stock market is expected to start by retracing the sharp rise from the previous day due to the burden of rising U.S. interest rates and oil price increases caused by concerns over Israel’s strike on Iranian oil facilities." They added, "It will be influenced by changes in the stock prices and supply-demand of semiconductor stocks such as Samsung Electronics, as well as capital flows in the Asian region surrounding the Chinese stock market."

They continued, "Samsung Electronics’ preliminary earnings announcement, scheduled before the market opens, is important. Even if the results meet market expectations, it will help alleviate the accumulated negative sentiment across the KOSPI. It is necessary to consider the possibility that aggressive net selling by foreigners has pushed the market into a supply vacuum and oversold territory. This applies not only to semiconductors but also to the overall KOSPI."