[Good Morning Market] Tech Stocks Rally on US-Saudi Cooperation... Korean Semiconductors and Power Equipment in Focus

Nasdaq Rises 1.61%, S&P 500 Turns Positive
"Monitor Supply and Demand Changes for MSCI Korea Index Inclusions and Exclusions"

Following optimism over potential tariff easing between the United States and China, as well as news of large-scale economic cooperation between the United States and Saudi Arabia, the New York stock market saw a strong performance led by technology stocks. Against this backdrop, on May 14, the Korean stock market is also expected to open higher, particularly in sectors such as semiconductors and power equipment.

AP Yonhap News

On May 13 (local time), the New York stock market ended with mixed results. The Dow Jones Industrial Average, which focuses on blue-chip stocks, closed at 42,140.43, down 269.67 points (0.64%) from the previous trading day. However, the S&P 500 rose by 42.36 points (0.72%) to 5,886.55, and the Nasdaq climbed by 301.74 points (1.61%) to 19,010.08. Notably, the S&P 500, which had fallen by 17% compared to the beginning of the year due to tariff effects, rebounded on this day and is now up 0.1% year-to-date.

By stock, Nvidia surged 5.63%, leading the rally in technology shares. Jensen Huang, CEO of Nvidia, announced at the US-Saudi Investment Forum held in Saudi Arabia during US President Donald Trump’s Middle East tour that the company would supply more than 18,000 artificial intelligence (AI) chips to the local firm Humane. As a result, semiconductor stocks such as AMD (up 4.01%) and Broadcom (up 4.89%) also rose. Companies accompanying the Saudi visit, including Tesla (up 4.93%) and Palantir (up 8.14%), also showed strong gains.

Comments made by President Trump during his Middle East tour also contributed to a favorable atmosphere in the stock market. After a meeting with Saudi Crown Prince Mohammed bin Salman, Trump stated, "We have secured an additional $1 trillion in investment and product purchases from Saudi Arabia," and added, "Investment and jobs will surge in the US, and the stock market will rise further." On this day, the United States and Saudi Arabia signed a strategic economic partnership agreement focused on strengthening investment, exports, and security cooperation, with a total value of $600 billion (approximately 850 trillion won).

Investor sentiment was also positively influenced by the April Consumer Price Index (CPI), which reflected the effects of tariff policies and came in below market expectations, easing inflation concerns. The index rose by 2.3% year-on-year, marking the lowest level since February 2021, and fell short of both the March CPI and market forecasts (both at 2.4%). As expectations for price stability grew, government bond yields saw a limited decline immediately after the CPI announcement.

Regarding the Korean stock market on this day, Han Jiyeong and Lee Sunghoon, researchers at Kiwoom Securities, predicted, "Supported by relief over the US April CPI and positive momentum from AI, stocks related to HBM (high-bandwidth memory) and power equipment are expected to rise." They added, "Whether there will be rotation among tariff-insensitive stocks, leading stocks, and affected stocks will be a key point to watch, and attention should also be paid to changes in prices and supply-demand for stocks included or excluded from the MSCI Korea Index, such as Hanwha Systems, Samyang Foods, Ecopro Materials, and NCSoft."