[Good Morning Stock Market] US Stocks Rise Despite Trade War Concerns... "KOSPI Expected to See Sector-by-Sector Market"

The U.S. stock market in New York rose across the board. Despite concerns over a second U.S.-China trade war, expectations for negotiations between the two countries influenced the market. On the 5th, the Korean stock market is expected to show a sector-specific trend.

AFP Yonhap News

On the 4th (local time), the Dow Jones Industrial Average, centered on blue-chip stocks, closed at 44,556.04, up 134.13 points (0.3%) from the previous trading day in the New York stock market. The S&P 500, focused on large-cap stocks, rose 43.31 points (0.72%) to 6,037.88, and the tech-heavy Nasdaq jumped 262.06 points (1.35%) to close at 19,654.02.

The Trump administration’s announced additional 10% general tariff on China officially took effect on the 4th. In response, China immediately announced retaliatory measures. However, following Mexico and Canada, there emerged a sentiment that China might also see a dramatic suspension of tariff imposition through dialogue.

By stock, Palantir, an AI-based data analytics software company, surged 24% on strong earnings. Other AI-related big tech companies such as Nvidia (1.7%) also showed strength, buoyed by Palantir’s strong performance.

Han Ji-young, a researcher at Kiwoom Securities, said, "Tariffs remain at the center of market uncertainty, with China announcing retaliatory tariffs against the U.S.’s additional 10% tariffs on China," but added, "Unlike the tariff imposition on Mexico and Canada on the 3rd, the limited stock price shock indicates a learning effect is taking place."

She continued, "The fact that China set the tariff imposition date to the 10th, and that the U.S. imposed a 10% tariff instead of 60%, can be seen as leaving room for negotiations through dialogue between the two countries."

The domestic stock market is expected to show a sector-specific trend despite expectations for U.S.-China tariff negotiations. Han said, "Despite a favorable external environment such as expectations for U.S.-China tariff negotiations, the market is expected to show a sector-specific trend influenced by after-hours price declines of Alphabet and AMD, as well as earnings announcements from domestic individual companies such as KB Financial scheduled during the trading session."

Kim Ji-won, a researcher at KB Securities, explained, "The fact that China’s retaliatory measures were not as strong as expected and the European Union (EU) also expressed willingness to negotiate are positive signs," adding, "Although tariff uncertainty remains, concerns have eased, so it is necessary to prepare for increased volatility for the time being."