[Good Morning Market] US-China Tariff Truce... "Korea's Semiconductor and Automobile Sectors in Focus"

The New York stock market surged overnight as trade tensions between the United States and China eased. On May 13, the Korean stock market is expected to maintain its upward trend, but differentiation among sectors is likely to appear due to the impact of tariffs. According to analysts, investor sentiment may shift toward sectors such as semiconductors, automobiles, and secondary batteries, which had previously been classified as tariff-affected industries.

On the 12th (local time), a trader is working at the New York Stock Exchange in the United States. Photo by Reuters Yonhap News

On the 12th (local time) at the New York Stock Exchange, the Dow Jones Industrial Average, which focuses on blue-chip stocks, closed at 42,410.1, up 1,160.72 points (2.81%) from the previous trading day. The S&P 500, representing large-cap stocks, jumped 184.28 points (3.26%) to 5,844.19, while the tech-heavy Nasdaq soared 779.43 points (4.35%) to close at 18,708.34.

Technology stocks led the rally. Amazon surged 8.07%, while Apple and Tesla rose 6.31% and 6.75%, respectively. Best Buy, a major U.S. electronics retailer, also jumped 6.57%. Best Buy relies on China for 55% of its electronics supply chain. Other major U.S. retailers, such as Target and Home Depot, gained 4.85% and 3.83%, respectively.

The main driver behind the U.S. stock market's rise was the agreement between the U.S. and China to reduce mutual tariffs by 115 percentage points for 90 days. Through their first official trade negotiations, the two countries agreed to lower the U.S. tariff rate on Chinese goods from 145% to 30%, and China's tariff rate on U.S. goods from 125% to 10%. This tariff reduction will be applied for an initial period of 90 days. As the first negotiations yielded better-than-expected results, optimism grew regarding the possibility of additional agreements in the future.

On this day, sectors that had previously been classified as tariff-affected industries are expected to rise in the Korean stock market. Noh Donggil, a researcher at Shinhan Investment Corp., stated, "This tariff agreement is favorable for the domestic stock market, as it controls the rapid slowdown of the U.S. economy and maintains discriminatory tariffs against China," adding, "Korea is currently in preliminary negotiations with the U.S., and with the new administration's inauguration, the completion of negotiations is expected. If tariff negotiations proceed, Korea could take market share from China in the U.S. import market."

Noh also analyzed, "As the U.S. eases tariffs on Chinese imports, sectors such as semiconductors and IT hardware, which are produced in China and ultimately consumed in the U.S., have become more advantageous. The sector landscape is originally divided into tariff-defensive stocks (shipbuilding, machinery, defense) and tariff-affected stocks (semiconductors, automobiles, secondary batteries), but there is a possibility that the focus may temporarily shift toward tariff-affected stocks."

Han Jiyeong, a researcher at Kiwoom Securities, said, "The easing of the tariff war is expected to provide upward momentum for major domestic stocks such as semiconductors, and the domestic stock market is likely to show an upward trend," noting, "The confirmation of the U.S.-China tariff suspension could trigger a rotation into tariff-affected stocks such as steel, IT·home appliances, semiconductors, and automobiles. During this process, short-term stock price volatility in the previous leading sectors should be anticipated."

Kim Jiwon, a researcher at KB Securities, commented, "The U.S. and China reached a larger-than-expected agreement on tariff reductions, leading to a significant recovery in investor sentiment," adding, "While the domestic index is expected to maintain its upward trend, differentiation among sectors due to the impact of tariffs is also likely to continue."