[Good Morning Stock Market] Amid Reciprocal Tariff Bombardment and Political Turmoil... Caution on Volatility in Han Stock Market

U.S. President Donald Trump's reciprocal tariffs have taken shape. The New York stock market closed higher as uncertainty was resolved. South Korea confirmed a higher-than-expected 25% tariff rate, and with the impeachment trial scheduled for this week, the domestic stock market is expected to show significant volatility.

On the 2nd (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 42,225.32, up 235.36 points (0.56%) from the previous session. The S&P 500 index rose 37.90 points (0.67%) to 5,670.97, and the Nasdaq Composite index increased by 151.15 points (0.87%) to 17,601.05.

Donald Trump, President of the United States, is holding a signed executive order on tariffs in the White House Rose Garden. Photo by Yonhap News

President Trump announced country-specific reciprocal tariffs targeting all U.S. trading partners from the White House Rose Garden shortly after the market closed. He announced a 25% reciprocal tariff on South Korea. Other countries include China at 34%, Vietnam 46%, Indonesia 32%, Japan 24%, the United Kingdom 10%, and Australia 10%. The stock market's rise that day appears to reflect expectations of uncertainty being resolved.

Among the seven major tech stocks in the 'Magnificent 7' (M7) group that day, Nvidia (0.25%), Apple (0.31%), Tesla (5.33%), and Amazon (2.00%) rose, while Microsoft (0.01%), Alphabet (Google's parent company) (0.02%), and Meta (Facebook's parent company) (0.35%) declined.

Tesla rose amid speculation that CEO Elon Musk might soon step down from his role in the U.S. administration and return to the company. Nvidia continued its upward trend for the second consecutive day after rebounding for the first time in six trading days the previous day.

Seokhwan Kim, a researcher at Mirae Asset Securities, said, "The reciprocal tariff rates announced today are close to the most negative scenario the market had anticipated," adding, "Once countries begin responding, the second phase of the global trade war will commence."

Meanwhile, the domestic stock market is likely to start lower due to political turmoil, including the impeachment trial verdict of President Yoon Seok-yeol scheduled for the 4th, combined with the tariff storm. However, the impact of tariffs is expected to ease somewhat toward the latter part of the trading session through comparisons with competing countries.

Jiyoung Han, a researcher at Kiwoom Securities, said, "The stock market will likely start lower influenced by Trump's reciprocal tariff announcement at a higher level than expected and the sharp drop in Nasdaq after-hours futures," adding, "During the session, it is expected to attempt to reduce losses influenced by tariff news flows conveyed through the White House and related parties."

Jiwon Kim, a researcher at KB Securities, explained, "This is a somewhat stronger measure than the market expected, raising concerns about inflation and economic slowdown, making selling pressure inevitable today."