[Good Morning Market] "US Stocks Edge Up... Korea Expected to Recover Losses"

New York Stock Market Holds Up Despite U.S. Credit Rating Downgrade
"Rebound Expected in Korea's Bio, Internet, and Secondary Battery Sectors"

Despite the downgrade of the U.S. credit rating, the three major New York stock indexes closed slightly higher, and on May 20, the Korean stock market is expected to recover some of the losses from the previous day.

On the 19th (local time), at the New York Stock Exchange, the blue-chip-focused Dow Jones Industrial Average (Dow Jones Index) closed at 42,792.07, up 137.33 points (0.32%) from the previous session. The large-cap S&P 500 Index rose 5.22 points (0.09%) to 5,963.6, while the tech-heavy Nasdaq Index gained 4.36 points (0.02%) to close at 19,215.46.

On the 19th (local time), the index trend is displayed on a monitor screen at the New York Stock Exchange in the United States. Photo by Reuters Yonhap News

On this first trading day after the U.S. credit rating downgrade, all three major New York indexes ended the session with slight gains. Although the market opened lower due to both the uncertainty surrounding President Donald Trump's tariff policies and the additional impact of the national credit rating downgrade, bargain buying soon emerged as the federal government debt issue was already considered a known risk.

Previously, on May 16, Moody's downgraded the U.S. sovereign credit rating from the highest grade of 'Aaa' to 'Aa1', citing a sharp increase in federal government debt. This is the first time in 108 years that Moody's has downgraded the U.S. sovereign credit rating from its highest level. With this move, the United States has now lost its top credit rating status from all three major global credit rating agencies?Fitch, Standard & Poor's (S&P), and Moody's.

Kim Ji-won, a researcher at KB Securities, said, "Key figures in the Trump administration downplayed the credit rating downgrade as 'lagging' and the perception that it was 'not surprising' spread further. Most tech stocks, with the exception of Apple and Tesla, performed strongly." She added, "Major overseas conferences such as Microsoft's Build and Taiwan's Computex revealed new issues related to artificial intelligence (AI), which boosted large-cap tech stocks, including semiconductors."

By stock, Walmart fell 0.12%. The stock dropped early in the session after President Trump urged Walmart to withdraw its planned price hikes, which had been announced in response to tariff pressures, but later recovered some of its losses. Microsoft rose 1.01%, Nvidia closed up 0.13%, while Apple fell 1.17%.

Regarding the outlook for the Korean stock market, Han Ji-young, a researcher at Kiwoom Securities, said, "The rebound in the U.S. stock market, despite the credit rating downgrade, will help the Korean market recover some of the previous day's losses." She added, "In terms of sectors, growth-style industries such as bio, internet, and secondary batteries?which saw relatively high downward pressure the day before?are expected to see strong rebounds."

Intraday liquidity changes should be monitored. Han also emphasized, "Because short-term market conditions may remain volatile due to aftershocks from the credit rating downgrade, it is important to closely watch changes in the U.S. futures and bond markets during the session." Kim Ji-won noted, "As the U.S. stock market held up well after the credit rating issue was resolved, a rebound is also expected in the domestic market, but the increased desire to sell shares should be taken into account."