[Good Morning Stock Market] Extreme Volatility in US... Korea Expected to Rebound with Inflow of Low-Price Buying

As the U.S. stock market experiences extreme volatility due to President Donald Trump's tough tariff policies, the domestic stock market is expected to rebound on the 8th, fueled by bargain hunting following the previous day's plunge.

On the 7th (local time), the three major U.S. stock indices closed mixed in New York. The Dow Jones Industrial Average, centered on blue-chip stocks, fell 349.26 points (0.91%) to 37,965.6, while the large-cap S&P 500 index dropped 11.83 points (0.23%) to 5,062.25. In contrast, the tech-heavy Nasdaq index rose 15.48 points (0.1%) to close at 15,603.26.

On that day, the U.S. stock market saw significant volatility due to news related to reciprocal tariffs. The market started sharply lower amid President Trump's determination to enforce tariff policies but surged early in the session after reports emerged that tariffs on all countries except China would be suspended for 90 days. However, when this was revealed to be fake news, the gains were fully surrendered. Later in the session, President Trump heightened market tension by warning that he might impose an additional 50% tariff on China, which had already announced retaliatory tariffs of 34% against the U.S.

However, the possibility of tariff negotiations remains a factor for a future market rebound. President Trump has shown willingness to negotiate with the European Union (EU), India, Japan, and others, mindful of the blame for the stock market plunge. Ji-young Han, a researcher at Kiwoom Securities, analyzed, “It is unlikely that dramatic news will emerge before the reciprocal tariffs take effect on the 9th, but considering the increasing criticism of tariff policies from politicians and voters, there is a possibility of positive developments improving the market sentiment.”

Following the more than 5% drop in the domestic stock markets due to the Trump tariff shock the previous day, a partial rebound is expected today. This is because the U.S. stock market narrowed its losses, and technical and bargain buying may flow in after the sharp decline. In particular, a recovery centered on the semiconductor sector may appear. Nvidia (3.6%), Micron (5.6%), and the Philadelphia Semiconductor Index (2.7%) in the U.S. stock market successfully rebounded sharply, and Samsung Electronics’ announcement of better-than-expected preliminary first-quarter results could have a positive impact.

Researcher Han advised, “Currently, the domestic stock market has entered an oversold territory in terms of valuation. Rather than responding with selling, it is a realistic alternative to hold existing positions and observe changes in the situation.”