[Good Morning Stock Market] Mutual Tariff Suspension & US Stock Surge... "Korea Expected to Start with Sharp Rise"

With U.S. President Donald Trump's sudden decision to suspend reciprocal tariffs by country, the New York stock market surged sharply, and on the 10th, the Korean stock market is expected to start with a 'sharp rise' due to eased concerns over the global trade war.

On the 9th (local time), a trader is working at the New York Stock Exchange (NYSE) in the United States. Photo by AFP

On the 9th (local time) at the New York stock market, the Dow Jones Industrial Average (Dow) centered on blue-chip stocks closed at 40,608.45, soaring 2,962.86 points (7.87%) from the previous trading day. The S&P 500 index, focused on large-cap stocks, jumped 474.13 points (9.52%) to 5,456.9, and the Nasdaq index, centered on tech stocks, skyrocketed 1,857.06 points (12.16%) to close at 17,124.97. The Dow posted its largest gain in 4 years and 11 months since May 2020. The S&P 500 and Nasdaq also recorded their biggest increases in 17 years since October 2008 and 24 years since January 2001, respectively.

The Trump administration's sudden suspension of reciprocal tariffs stirred investor sentiment. President Trump announced on his social networking service (SNS) Truth Social in the afternoon that tariffs on China, which retaliated against the U.S., would be raised to a total of 125% and take effect immediately, while reciprocal tariffs on other countries showing willingness to negotiate would be suspended for 90 days. This is interpreted as narrowing the front of the tariff war to China, and China, while reaffirming its basic stance on U.S.-China economic and trade relations by releasing a trade white paper, left open the possibility of negotiations with the U.S.

By stock, large technology stocks surged. Tesla jumped 22.69%, Nvidia rose 18.72%, and Apple soared 15.33%. Microsoft (MS) increased by 10.13%, Alphabet, Google's parent company, and Meta, Facebook's parent company, rose 9.88% and 14.76%, respectively. U.S. automakers General Motors (GM) and Ford increased by 7.67% and 9.32%, respectively.

The Korean stock market is expected to start with a sharp rise today. Seonghoon Lee, a researcher at Kiwoom Securities, said, "The domestic stock market will start with a sharp rise centered on tariff-affected sectors including semiconductors due to the U.S. stock market surge following Trump's 90-day suspension of reciprocal tariffs and the sharp drop in the won-dollar exchange rate," adding, "It should be noted that the KOSPI's 12-month forward price-to-book ratio (PBR) has fallen to 0.79 due to the recent sharp decline caused by the reciprocal tariff issue."

He added, "From a valuation perspective, there is sufficient room for entry into the domestic stock market," and "It is necessary to pay attention to whether large-scale capital inflows from foreigners, who showed a net selling trend of about 8 trillion won this month, can proceed."

Jiwon Kim, a researcher at KB Securities, said, "With the 90-day suspension of reciprocal tariffs, Korea will be subject to a universal tariff of 10%. The domestic stock market is expected to rebound reflecting the suspension of reciprocal tariffs," but added, "However, the intensification of U.S.-China conflict and increased inflationary pressure are factors to consider."