[Good Morning Stock Market] Mixed Trends Ahead of Reciprocal Tariffs... Korean Stock Market Likely to See Increased Caution

Major Events Ahead: U.S. Reciprocal Tariffs and Korean Impeachment Ruling
Expectations Rise for Won-Dollar Exchange Rate Stabilization as Uncertainty Eases

The U.S. stock market closed mixed with volatility ahead of the implementation of reciprocal tariffs. Following a rebound the previous day fueled by bargain buying after last month's decline, the domestic stock market is expected to remain cautious ahead of major events such as the impeachment ruling and reciprocal tariffs.

On the 1st (local time) at the New York Stock Exchange (NYSE), the S&P 500 index closed at 5,633.07, up 0.38% from the previous day. The tech-heavy Nasdaq index also rose 0.87% to 17,449.89. The Dow Jones Industrial Average closed down 0.03% at 41,989.96.

Volatility continued throughout the day ahead of the reciprocal tariff announcement scheduled for the next day. The White House announced that President Donald Trump would announce the reciprocal tariffs as planned at 4 p.m. on the 2nd in the White House Rose Garden, with immediate effect. Concerns over a global trade war remain, and with several economic indicators released, market volatility appears to be increasing.

The U.S. market initially opened lower but the decline widened after the Institute for Supply Management (ISM) reported the March Manufacturing Purchasing Managers' Index (PMI) at 49.0, below both market expectations and the previous month, indicating weakness. Subsequently, expectations for a dovish monetary policy from the U.S. Federal Reserve (Fed) amid economic slowdown boosted large tech stocks and led to a market rebound.

Alphabet, Google's parent company, rose 1.7%, and Microsoft gained 1.8% by the close. Tesla ended the day up 3.6%, buoyed by positive expectations from French sales data. Just before the close, buying interest was seen particularly in the semiconductor sector, reflecting positive demand in individual sectors.

The domestic stock market is also expected to remain cautious. Although recent overselling may support the downside of the index, the sluggish ISM manufacturing index?which precedes domestic export manufacturing profits?and concerns over reciprocal tariffs suggest no clear direction will emerge.

However, expectations for resolving domestic political risks have increased following the announcement that the Constitutional Court will deliver its impeachment ruling on President Yoon Suk-yeol at 11 a.m. on the 4th. Lee Seong-hoon, a researcher at Kiwoom Securities, explained, "Despite the recent weakness of the U.S. dollar, the won-dollar exchange rate rose to the 1,470 won level largely due to Korea-specific political uncertainties. Once the political uncertainty is resolved after the impeachment ruling and the exchange rate stabilizes, it will have a favorable impact on foreign demand in the domestic stock market."

Meanwhile, the MSCI Korea Index Exchange-Traded Fund (ETF), closely linked to the domestic stock market, closed up 1.50%. The Philadelphia Semiconductor Index also turned positive, rising 0.28%.