[Good Morning Market] U.S. Stocks Give Up Early Gains, Optimism Grows in Korean Market

New York Stock Exchange Closes Slightly Higher After Giving Up Early Gains
Concerns Persist Over Tariff Policy Despite Ruling Invalidating Tariffs
KOSPI Surpasses 2,700 Amid Post-Election Optimism
Possibility of Market Consolidation Due to Short-Term Overheating

The three major indices on the New York Stock Exchange closed slightly higher, contrary to early expectations. Although a federal court put a brake on President Donald Trump's tariff policy, concerns remained that uncertainty had not yet been resolved, which seemed to weigh on the market. A prolonged legal battle between the courts and the administration is expected to continue for the time being. In the domestic stock market, expectations for a market boost after the presidential election have grown, but there are observations that a period of consolidation may occur due to concerns over a short-term technical overheating.

On May 29 (local time), at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 42,215.73, up 0.28% from the previous day. The S&P 500 rose 0.40% to 5,912.17, and the tech-heavy Nasdaq Composite gained 0.39% to close at 19,175.87.

The results were seen as somewhat disappointing compared to early-session expectations. U.S. stock index futures had already surged more than 1% in Asian trading. After the close of the regular session on May 28, optimism spread in the futures market when the U.S. Court of International Trade ruled invalid the Trump administration's "reciprocal tariff policy" and the "fentanyl tariffs" imposed on Canada, Mexico, and China.

However, after the actual market opened, the Dow turned lower at one point. This was because the Trump administration still has many tools to enforce tariffs, and there is a possibility that the ruling could be overturned on appeal. News that the U.S. Court of Appeals for the Federal Circuit had approved a temporary stay of the lower court's ruling also acted as a negative factor. Until the appellate court's decision is announced, tariffs can continue to be imposed as before.

Since it will take about a year for the appellate court and Supreme Court to reach a final decision, the standoff between President Trump and the U.S. Court of International Trade has now entered a battle of attrition. Even if the Supreme Court rules to invalidate the reciprocal tariffs, President Trump still has other means to impose tariffs, such as Section 232 of the Trade Expansion Act (regulating imports for national security reasons), Section 301 of the Trade Act (addressing intellectual property infringement and unfair trade practices), and safeguard measures (protecting specific domestic industries).

Meanwhile, the Korean stock market continued to show an upward trend, with the KOSPI surpassing 2,700 the previous day, and expectations for a post-election market boost remain. The MSCI Korea Index ETF, which is closely linked to the domestic market, rose 1.73%, while the MSCI Emerging Markets ETF gained 0.37%. The Philadelphia Semiconductor Index also climbed 0.53%.

However, there are also calls for caution due to short-term overheating. The KOSPI night futures have already fallen 0.47%. Han Ji-young, a researcher at Kiwoom Securities, said, "Technically, short-term overheating signals are being detected," and added, "Given that the U.S. market also slipped yesterday, today will likely be a day for the market to consolidate, especially among stocks that surged the previous day, in preparation for June trading."