[Good Morning Stock Market] 'Jeonyak Hugang' Korean Stock Market, Can It Withstand the Impact of the Sharp Decline in Major US Stocks?

On the 26th, the domestic stock market is expected to show a weak trend due to the cooling of U.S. consumer sentiment and the sharp decline of major leading stocks such as Nvidia and Tesla. However, since the recent domestic market has exhibited a 'weak start, strong finish' pattern?starting with a decline but narrowing losses by the close?attention is required when observing momentum by sector.

On the 25th (local time), the Dow Jones Industrial Average, centered on blue-chip stocks, closed at 43,621.16, up 159.95 points (0.37%) from the previous session. In contrast, the Nasdaq Composite Index, focused on technology stocks, and the large-cap S&P 500 Index closed down for the fourth consecutive trading day at 19,026.39, down 260.54 points (1.35%), and 5,955.25, down 28 points (0.47%), respectively.

Reuters Yonhap News

On that day, the market slid as consumer confidence in the U.S. economy dropped more sharply than expected, dragging down stocks led by AI leading stocks and big tech companies that had driven the U.S. stock market last year. 'AI defense stock' Palantir's stock price fell for five consecutive trading days, dropping 3.13%, and Nvidia, which was set to announce its Q4 earnings the next day, also declined by 2.80% amid caution. Notably, Tesla's stock price plummeted more than 8%, breaking below the $1 trillion market capitalization level for the first time since November last year. The news that European market sales plunged 45% year-over-year acted as a negative factor.

Han Ji-young, a researcher at Kiwoom Securities, said, "Consumer sentiment indices and similar indicators have been perceived as minor indicators with little influence on the stock market, but sensitivity to negative factors seems to have increased compared to before," pointing to the current U.S. stock market's deepening adjustment of M7 stocks such as Tesla and Nvidia, where pessimism is prevailing, as the cause.

Due to the cooling of U.S. consumer sentiment and the sharp decline of major leading stocks?negative factors originating from the U.S.?the domestic stock market is also expected to start lower today. Han said, "During the trading session, due to increased volatility in supply and demand in key domestic sectors such as semiconductors and secondary batteries, the overall index is expected to maintain a stagnant trend throughout the day."

However, the recent pattern of the domestic stock market narrowing losses after a sharp decline at the start?the 'weak start, strong finish' pattern?is a noteworthy factor. Kim Ji-won, a researcher at KB Securities, said, "While tariff pressures from Trump continue and there are variables to watch this week such as Nvidia's earnings and Personal Consumption Expenditures (PCE), which suggest an extension of caution, the recent domestic market has limited its losses compared to global markets, so it is necessary to focus on sectors with momentum rather than concerns."