[Good Morning Stock Market] Monitoring Trump Tariff Trends... South Korea Expected to See Sector-by-Sector Rotation Market

On the 17th, the domestic stock market is expected to continue sector-specific trends based on U.S. President Donald Trump's tariff policy developments, as well as earnings reports and economic indicators from major domestic and international companies.

Earlier, the New York stock market closed mixed on the 14th (local time). The Dow Jones Industrial Average, focused on blue-chip stocks, ended at 44,546.08, down 165.35 points (-0.37%) from the previous session. The large-cap S&P 500 index fell 0.44 points (-0.01%) to 6,114.63, while the tech-heavy Nasdaq index rose 81.13 points (0.41%) to close at 20,026.77. This was due to mixed impacts from key real economy indicators, including weak January retail sales and strong industrial production, amid uncertainty over President Trump's tariff policies.

Yonhap News

The KOSPI, which has been building resilience against tariff risks, rose for four consecutive days last week (2.74%) to close at 2,591.05. Sector rotation was observed, with 23 out of 26 sectors gaining, and trading volume reached 17 trillion won on the 13th. Particularly, momentum from defense and shipbuilding sectors’ earnings and hopes for an end to the Russia-Ukraine conflict helped push the index above the 2,600 mark during intraday trading. The KOSDAQ also jumped 1.81% over the past week.

Lee Kyung-min, a researcher at Daishin Securities, said, "It has been reconfirmed that Trump's tariff policy is a negotiation tool rather than an objective, and the possibility of an end to the Russia-Ukraine war has rapidly gained momentum, serving as a key driver for the KOSPI rebound. Additional upward momentum for the KOSPI is expected from global bond yields, the stabilization of the dollar’s downward trend, reaffirmed recovery and policy expectations in China’s economy, resolution of domestic political risks, and foreign investors’ net buying based on financial market stability."

However, volatility in the domestic stock market due to tariffs remains a factor to be cautious about. Han Ji-young, a researcher at Kiwoom Securities, noted, "Although the outline of tariffs has been shaped, such as Trump’s announcement last Friday to add tariffs on automobiles (scheduled for April 2), continuous changes in details are causing confusion among the affected countries. Considering that the late last week’s stock price strength in domestic automobile and secondary battery sectors was due to expectations of tariff exemptions, volatility is expected to emerge early this week, centered on export-sensitive stocks vulnerable to tariffs."

The minutes of the U.S. Federal Open Market Committee (FOMC) meeting, to be released on the 20th, are also a key point to watch. The researcher said, "Federal Reserve Chair Jerome Powell did not separately mention the impact assessment of tariffs during last week’s congressional hearings, but since February, other officials such as the Chicago Federal Reserve Bank president have expressed concerns about tariff-driven inflation. Market attention is focused on remarks by individual Federal Reserve Bank presidents in the upcoming FOMC minutes."