[Good Morning Market] US Stock Market Mixed Close... "Korea's Index Expected to Have Limited Upside"

Cautious sentiment expected in Korean market
Amid uncertainty ahead of Trump's reciprocal tariff announcement

Amid mixed closes of the three major U.S. stock indices in New York ahead of the Trump administration's reciprocal tariff announcement on the 2nd, the Korean stock market on the 1st is expected to see cautious market sentiment due to tariff uncertainties.

On the 31st (local time), traders are working at the New York Stock Exchange in the United States. Photo by Reuters and Yonhap News.

On the 31st (local time) in the New York stock market, the Dow Jones Industrial Average (Dow) focused on blue-chip stocks closed at 42,001.76, up 417.86 points (1.0%) from the previous trading day. The large-cap S&P 500 index rose 30.91 points (0.55%) to close at 5,611.85. The tech-heavy Nasdaq index fell 23.7 points (0.14%) to end at 17,299.29.

The U.S. stock market initially plunged, especially in big tech stocks, following reports of the possibility of President Trump's implementation of universal tariffs (WSJ), but later mostly recovered losses due to quarter-end window dressing demand and inflows of bargain-hunting funds. Window dressing refers to institutional investors managing closing prices of held stocks before the fiscal period ends to boost fund returns.

By individual stocks, selling pressure on tech stocks intensified, with Nvidia falling 1.18%, marking a drop of over 30% from its 52-week high. Tesla declined 1.67%, and Microsoft (MS) fell 0.90%. However, Apple rose 1.94%, influenced by the launch of the iPhone 16e. Dividend stocks Coca-Cola and Johnson & Johnson increased by 1.78% and 1.3%, respectively. U.S. automakers Ford and General Motors (GM) rose 3.19% and 0.75%, respectively.

Kim Seok-hwan, a researcher at Mirae Asset Securities, said, "Nvidia fell due to a negative report from Goldman Sachs but showed long-term growth potential. Tesla was weak due to CEO Elon Musk's political controversies and a forecasted decline in vehicle deliveries." He added, "Although major U.S. indices closed mixed overall, risk aversion sentiment has strengthened, indicating significant future market uncertainty."

Investors' attention is focused on the U.S. reciprocal tariff announcement. On the 2nd, U.S. President Donald Trump will announce reciprocal tariffs at the White House Rose Garden with his staff fully assembled. The Trump administration plans to impose reciprocal tariffs on all trading partners without exceptions.

Regarding the Korean stock market that day, Kim Ji-won, a researcher at KB Securities, noted, "Volatility is expected as domestic short selling resumes, Trump's tariffs become a reality, and concerns about U.S. stagflation intertwine." She also pointed out, "March export-import statistics in Korea, China's Caixin Manufacturing Purchasing Managers' Index (PMI), and the Reserve Bank of Australia (RBA) monetary policy meeting are scheduled."

Lee Seong-hoon, a researcher at Kiwoom Securities, said, "Despite perceptions of excessive declines the previous day, some bargain-hunting funds will flow mainly into large-cap stocks." However, he added, "The won-dollar exchange rate stabilizing around the 1,470 won level and increased short-term supply-demand volatility due to the resumption of short selling will limit upward movement of the index." He further stated, "In the short term, as exposure to the impact of short selling is possible, the relative superiority of large-value stock sectors is likely to continue."