[Good Morning Market] US Stock Market, Growing Expectations for 'Santa Rally'... Tech Stocks Strengthen

Year-End Uptrend Continues Supported by Tech Stock Rally
‘Magnificent 7’ and Semiconductor Stocks Strengthen
Buying Momentum Expected from Year-End Spending and Bonus Increase

The U.S. stock market closed higher a day before Christmas Eve, raising expectations for a 'Santa Rally.' The Santa Rally refers to the phenomenon where stock prices rise from the last week of December through the first week of the new year.

Reuters Yonhap News

On the 23rd (local time), at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 42,906.95, up 66.69 points (0.16%) from the previous session. The S&P 500 rose 43.22 points (0.73%) to 5,974.07, and the Nasdaq Composite increased by 192.28 points (0.98%) to 19,764.88, respectively.

On that day, the market showed weakness early on as investor sentiment wavered due to unexpected consumer data. The December U.S. Consumer Confidence Index from the nonprofit Conference Board (CB) was 104.7, the lowest level since September, plunging 8.1 points from the previous month’s 112.8. The mood, which seemed to dampen hopes for a Santa Rally, reversed to gains late in the session as buying interest flowed into big-tech-focused technology stocks.

Among the large tech stock group 'Magnificent 7 (M7),' six stocks rose except for Microsoft (-0.31%). Notably, Nvidia (3.69%) showed strength on news of establishing an overseas branch headquarters in Taiwan, and Apple (0.31%), the largest by market capitalization, hit a new all-time high at $255.27. Tesla, which had fallen for three consecutive trading days, rose 2.27%, and Broadcom, dubbed the 'second Nvidia,' surged 5.24%. Semiconductor stocks such as AMD (4.52%), TSMC (5.15%), Qualcomm (3.50%), and Intel (3.48%) also showed strong gains.

On Christmas Eve, the New York Stock Exchange will close early at 1 p.m. on the 24th and will be closed on the 25th. The market is increasingly hopeful for a Santa Rally, traditionally a period when stock prices rise due to increased buying by individual investors driven by year-end spending and bonuses. Craig Johnson, chief technical analyst at investment bank Piper Sandler, said, "The market’s foundation continues to maintain an upward trend," adding, "We have not given up on the possibility of Santa visiting the New York Stock Exchange."

On the 23rd, the KOSPI closed at 2,442.01, up 1.57% from the previous trading day. It rebounded after three days, supported by bargain buying from foreigners and institutions. Particularly, semiconductor stocks such as Samsung Electronics, SK Hynix, and Hanmi Semiconductor rose together, driving the index. The rise in shipbuilding stocks, expected to benefit from the U.S. Shipping Act proposal, was also notable.

Seonghoon Lee, a researcher at Kiwoom Securities, said, "On the 24th, the domestic stock market is expected to start higher, reflecting the Philadelphia Semiconductor Index’s 3.1% gain and the rally in big tech including the M7 in the U.S. market the previous day, especially in major IT sectors." He added, "Considering that the current price level has secured a low-price merit due to consecutive domestic and international adverse factors such as the December martial law situation and hawkish Federal Open Market Committee (FOMC) meetings, attempts to raise the low-level range of the index will continue until the end of the year." He also noted, "Considering that one of the main drivers for foreign investors participating in the domestic stock market is the won-dollar exchange rate, the current won-dollar rate in the 1,450 won range needs to show a downward stabilization movement."