[Good Morning Market] S&P and Nasdaq Hit New Highs Again... "Korean Stock Market Expected to Open Higher"

As optimism about the U.S. economy spreads and the New York stock market closed higher across the board, the Korean stock market on July 4 is expected to open higher and then experience sector rotation, with buying interest circulating among different industries.

On July 3 (local time) at the New York Stock Exchange, the blue-chip Dow Jones Industrial Average closed at 44,828.53, up 344.11 points (0.77%) from the previous session. The large-cap S&P 500 index rose 51.93 points (0.83%) to 6,279.35, while the tech-heavy Nasdaq index jumped 207.97 points (1.02%) to finish at 20,601.1. Both the S&P 500 and Nasdaq set new all-time highs for the second consecutive day.

Traders are working at the New York Stock Exchange in the United States. Photo by Reuters Yonhap News

Stronger-than-expected employment data for June fueled economic optimism. Nonfarm payrolls increased by 147,000 last month, significantly surpassing Bloomberg's projection of 106,000. Investors also focused on whether the Trump administration would reach additional trade agreements. After the U.S. signed a second trade deal with Vietnam the previous day, there was growing anticipation for another agreement before the mutual tariff suspension expires on July 8. The passage of the "One Big Beautiful Bill" (OBBB), which includes large-scale tax cuts and spending measures proposed by President Donald Trump, also contributed to the market's gains.

By stock, Cadence Design Systems, a semiconductor design software supplier, surged 5.1%. Synopsys rose 4.9%. Their share prices climbed after the U.S. government lifted restrictions on semiconductor design software exports to China. Nvidia gained 1.33%, while Microsoft (MS) and Apple increased by 1.58% and 0.52%, respectively.

Regarding the Korean stock market, Han Ji-young, a researcher at Kiwoom Securities, said, "Thanks to positive factors from the U.S., such as strong employment data and the passage of tax cuts, as well as momentum from the passage of the domestic Commercial Act amendment, the market is expected to open higher and continue sector rotation throughout the session."

She added, "The domestic stock market, which saw a record-breaking rally last month, is maintaining upward momentum this month as well, supported by the passage of the Commercial Act amendment and a partial easing of tariff uncertainties. However, in terms of sectors, the market feels more challenging. This is because, starting this month, the returns of leading sectors in June, such as shipbuilding, defense, and nuclear power, have quickly reversed compared to previously lagging sectors like steel, chemicals, healthcare, and transportation."