[Good Morning Stock Market] "US Tech Stocks Weakness, FOMC Caution... Korean Stock Market Expected to Start Lower"

The U.S. New York stock market closed lower across the board due to caution ahead of the Federal Open Market Committee (FOMC) meeting and weakness in major tech stocks, leading to expectations that the Korean stock market will start lower on the 19th.

Traders are working at the New York Stock Exchange (NYSE) in the United States. Photo by AFP Yonhap News

On the 18th (local time), in the New York stock market, the blue-chip-focused Dow Jones Industrial Average (Dow) closed at 41,581.31, down 260.32 points (0.62%) from the previous trading day. The large-cap S&P 500 index fell 60.45 points (1.06%) to 5,614.66, and the tech-heavy Nasdaq index dropped 304.54 points (1.71%) to close at 17,504.12.

Major tech stocks, including U.S. electric vehicle maker Tesla, were weak. Tesla's stock plunged 5.34% due to competition from new product announcements by Chinese electric vehicle maker BYD and a downgrade of its target price by RBC Capital Markets. The AI leader Nvidia fell 3.43% as the market reacted more negatively than expected to its new AI chip announcement. Alphabet, Google's parent company, dropped 2.34% after agreeing to acquire cybersecurity firm Wiz for $32 billion (approximately 46.5 trillion KRW).

With the Federal Reserve entering its FOMC schedule, investors are awaiting the interest rate decision and the release of the dot plot. Kim Seok-hwan, a researcher at Mirae Asset Securities, said, "Investors heightened caution while waiting for the Fed's interest rate outlook and remarks from Fed Chair Jerome Powell. They are also closely monitoring the impact of policies by U.S. President Donald Trump, such as tariffs, on the economy, which will likely increase market volatility."

Regarding the Korean stock market, Kim Ji-won, a researcher at KB Securities, noted, "Although new products were unveiled during Nvidia CEO Jensen Huang's keynote speech, a different atmosphere was sensed compared to before. Related domestic stocks may also show differentiated trends. However, uncertainty remains due to the impeachment trial verdict in Korea, making a cautious stance inevitable."

Han Ji-young, a researcher at Kiwoom Securities, forecasted, "The market will start lower due to U.S.-originated concerns such as the sharp drop in the Nasdaq. During the day, the market will show limited movement influenced by factors like the direction of the yen and FOMC caution." Han added, "Considering that Nvidia's new product launch failed to act as a catalyst for a stock rebound and even led to weakness in other semiconductor stocks, the domestic market should prepare for increased volatility in semiconductor stock supply and demand today."