[Good Morning Stock Market] US Market Takes a Rare Break... "Korea Expected to Start Lower"

As the New York stock market closed slightly lower, the KOSPI is expected to start lower on the 16th. The news that Nvidia's artificial intelligence (AI) chip 'H20' graphics processing unit (GPU) for the Chinese market faces export difficulties is likely to have an impact. However, with the U.S. leaving the door open for dialogue with China and the possibility of tariff negotiations, along with strong earnings reported by bank stocks, the decline is expected to be recovered.

Reuters Yonhap News

On the 15th (local time), the Dow Jones Industrial Average (Dow) focused on blue-chip stocks closed at 40,368.96, down 155.83 points (0.38%) from the previous trading day in the New York stock market. The S&P 500 index, centered on large-cap stocks, fell 9.34 points (0.17%) to 5,396.63, and the Nasdaq index, focused on tech stocks, dropped 8.32 points (0.05%) to 16,823.17.

The New York stock market showed a pause after U.S. President Donald Trump announced the possibility of revising the 25% tariff on auto parts the day before and refrained from imposing additional tariff measures. However, White House spokeswoman Caroline Levitt, reading President Trump's statement on his behalf, said, "The ball is in China's court," adding, "China must negotiate with us, but we do not need to negotiate with China."

By sector, banks rose on strong earnings. Citigroup reported first-quarter revenue of $21.6 billion, exceeding the market expectation of $21.29 billion. Bank of America (BofA) also surpassed market expectations with first-quarter revenue of $27.51 billion, up 5.9% year-over-year. On the back of these strong results, BofA rose more than 3%, and Citigroup rose over 2%. On the other hand, U.S. aircraft manufacturer Boeing fell more than 2%. The Chinese government, amid escalating tariff conflicts with the U.S., instructed domestic airlines to halt deliveries of Boeing aircraft, leading to a decline in Boeing's stock price.

On this day, the domestic stock market is expected to start lower but reduce the decline. Nvidia's stock plunged sharply in after-hours trading following news on the 9th that the U.S. government notified that exporting the H20 chip to China and certain other countries would require a license. This is expected to affect the domestic stock market.

Han Ji-young, a researcher at Kiwoom Securities, said, "After the U.S. market closed, the U.S. government decided to indefinitely ban the export of Nvidia's H20 chip to China due to security concerns," adding, "Nvidia's after-hours stock price is plunging by over 5%. Despite upward factors such as tariff negotiation progress and strong U.S. bank earnings, the negative news from Nvidia is expected to cause intraday volatility." She further added, "The domestic stock market is expected to show a trend of reducing the decline after starting lower."

However, continuous net selling by foreigners is expected to be a burden. Kim Ji-won, a researcher at KB Securities, said, "While President Trump urged China to engage in trade negotiations, China instead expanded trade sanctions against the U.S., heightening caution," adding, "With exchange rate stabilization downward, foreigners have net sold nearly 9 trillion won in the KOSPI this month, so it is necessary to focus on risk management."

One researcher explained, "The supply gap from foreigners is causing domestic investors to doubt the sustainability of the stock price rebound," and "At the same time, it raises concerns about what conditions need to be met for a full-scale shift to net buying."