[Good Morning Stock Market] Uncertainty Persists in US Markets... Anticipation of Rebound in Korean Markets That Fell Early

U.S. Stock Market Mixed Amid Trump's Fluctuating Tariff Policies
Korean Market Outperforms as Negative Factors Already Priced In
"Rebound Expected, but Momentum Likely to Be Limited"

Major U.S. stock indices continue to struggle. Uncertainty surrounding President Donald Trump's tariff policies is increasing market volatility. Having already priced in negative factors, the domestic stock market is expected to attempt a rebound.

On the 11th (local time), the S&P 500 closed at 5572.07, down 0.76% from the previous day. The tech-heavy Nasdaq index also fell 0.18% to 17,436.10. The Dow Jones Industrial Average experienced the largest drop, closing at 41,433.48, down 1.14% from the previous day.

President Trump's remarks and tariff policies are weighing on the market. On the day, Trump announced a 50% tariff increase on Canadian steel and aluminum but then reversed the decision later the same day. He also stated that he is "not worried about the stock market decline," which added to the uncertainty. Additionally, he said he "does not see any recession at all," attempting to quell recession concerns. The unpredictable and erratic moves have increased market skepticism and distrust.

However, key economic indicators have reduced recession uncertainty. The Job Openings and Labor Turnover Survey (JOLTS), reflecting the stability of the U.S. labor market, showed 7.74 million job openings in January, exceeding market expectations. Employment increased across the U.S., indicating a positive trend. This eased concerns about a cooling labor market and lowered recession uncertainty.

Tesla shares rose 3.8% from the previous day, buoyed by news of plans to double vehicle production in the U.S. and President Trump's statement about purchasing a Tesla vehicle. Broadcom also gained 3.1% due to increased demand for artificial intelligence (AI) chips and successful data integration strategies.

The market is awaiting the release of the U.S. February Consumer Price Index (CPI) and Producer Price Index (PPI) on the 12th and 13th. Market forecasts already suggest a decline from the previous month, emphasizing easing inflationary pressures. This implies that current inflation risk concerns may be excessive. However, given heightened sensitivity to negative news, if the actual February headline CPI exceeds market expectations by 0.2 percentage points, market volatility could increase.

The domestic stock market is expected to attempt a rebound. The MSCI Korea Index Exchange-Traded Fund (ETF), closely linked to the domestic market, closed up 1.11%. The previous day, the domestic market started sharply lower due to the Nasdaq's plunge amid U.S. recession fears. However, bargain buying reduced the decline to about 1.3% by the close. As of the 11th, this month's returns show the KOSPI up 0.2% and the KOSDAQ down 3.0%, outperforming the S&P 500 (-6.4%) and Nasdaq (-7.5%).

Han Ji-young, a researcher at Kiwoom Securities, said, "Supported by the cancellation of retaliatory tariffs between President Trump and Canada and renewed hopes for a Russia-Ukraine ceasefire, the domestic stock market is expected to attempt a rebound. However, caution over the U.S. February CPI and new Trump-related developments are likely to limit intraday rebound momentum."