[Good Morning Stock Market] Trump Postpones EU Tariffs... KOSPI Expected to Open Higher

On May 28, the KOSPI is expected to open higher, influenced by the Trump administration's decision to postpone tariffs on the European Union (EU).

The previous day on the New York Stock Exchange, the Dow Jones Industrial Average closed at 42,343.65, up 740.58 points (1.78%) from the previous session. The S&P 500 index ended at 5,921.54, up 118.72 points (2.05%), while the tech-heavy Nasdaq Composite finished at 19,199.16, up 461.96 points (2.47%).

This session, the New York stock market closed higher, supported by Trump’s EU tariff postponement, a sharp rebound in the May consumer sentiment index, and the 30-year Treasury yield falling below 5.0%. Additionally, strong performances by tech stocks such as Nvidia and Tesla contributed to the gains amid these favorable external conditions.

The improvement in sluggish consumer sentiment, which had weighed on the stock market for the past two to three months, had a positive impact on the market. The Conference Board Consumer Confidence Index for May recorded 98.0, surpassing the market consensus of 87.1, which triggered a rebound in the stock market. Upcoming data releases, such as the University of Michigan Consumer Sentiment Index, are also expected to show positive results.

The market is now focusing on Nvidia’s earnings announcement. Nvidia, which exerts significant influence across the entire artificial intelligence (AI) value chain?including high-bandwidth memory (HBM) and power devices?had previously reported fourth-quarter earnings on February 26 that exceeded consensus estimates. However, the stock plunged by over 8% at that time due to the shock from China’s DeepSeac and uncertainties surrounding tariffs.

Han Ji-young, a researcher at Kiwoom Securities, explained, "Currently, the stock environment surrounding Nvidia appears more favorable than in February," citing a series of positive factors such as robust capital expenditures by big tech companies like Microsoft (MS) and Trump’s tariff postponement. As a result, Nvidia’s share price has rebounded by about 40% from its early April low, returning to the $135 range and now approaching its previous high of $149.

The previous day, the domestic stock market closed mixed. Despite strength in defense stocks due to the possibility of increased NATO defense spending, profit-taking after a short-term surge in the previous session and caution ahead of the US 2-year Treasury auction contributed to the mixed performance.

The researcher added, "Today, despite the EU tariff postponement already being priced in, the US consumer sentiment surprise, stabilization of surging US interest rates, and a sharp rise in the Philadelphia Semiconductor Index (+3.4%) are expected to drive a strong opening." He further analyzed, "In terms of sectors, not only semiconductors?buoyed by expectations for Nvidia’s earnings and the potential acceleration of Stargate?but also entertainment stocks are likely to benefit from a favorable supply-demand environment, as expectations for the lifting of the Hallyu ban have been boosted by Tencent’s acquisition of a 9.4% stake in SM, which is held by HYBE."