[Good Morning Stock Market] Trump Tariff Noise... Sector Differentiation Expected

On July 9, the KOSPI is expected to show a differentiated performance among sectors, with the index's upward movement remaining limited.

On the previous day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 44,240.76, down 165.60 points (0.37%) from the previous session. The S&P 500 Index ended at 6,225.52, down 4.46 points (0.07%), while the Nasdaq Composite Index finished at 20,418.46, up 5.95 points (0.03%).

Following a similar situation in April, the stock market is once again facing President Donald Trump's tariff actions. Trump stated that the mutual tariffs would only have a grace period until August 1, with no further extensions. He also mentioned plans to impose a 50% tariff on copper (with the timing yet to be determined) and indicated that tariffs would be applied to other major items such as semiconductors and pharmaceuticals, thereby reviving tariff-related uncertainty across the economy and industry as a whole.

Although tariff-related uncertainty is likely to persist in the market for the time being, it is notable that the current market reaction is not as volatile as the sharp decline seen on April 2, when the mutual tariffs were first announced. Analysts note that this reflects the market's increased resilience, developed over several months of exposure to Trump's tariff risks.

Han Ji-young, a researcher at Kiwoom Securities, explained, "Considering that the U.S. government also regards curbing inflation as a key priority, the base scenario should be that the current mutual tariffs will not be imposed at the existing rates on August 1. Instead, we should expect a process of negotiation, implementation deferral, and renegotiation, which could lead to lower tariffs."

The previous day, despite Samsung Electronics' weak second-quarter earnings and the Trump administration's announcement of mutual tariffs, the introduction of a tariff grace period, along with strong performances in existing leading sectors such as shipbuilding, nuclear power, holding companies, and finance, helped the domestic market close with a sharp gain of over 1%.

Today, the domestic stock market is expected to see some profit-taking following the previous day's surge, while digesting Trump's tariff issues. As a result, the index's upward movement is likely to remain limited, with differentiated performance across sectors.

The researcher noted, "Since the upward trend in the index is still intact, we could see another round of catch-up rallies among previously neglected stocks, similar to last week. However, even if the existing leading stocks undergo some correction during this process, it would be more appropriate to view this as a buying opportunity rather than a reason to reduce their weightings."

He also added, "It is worth noting that the government and the ruling party are reportedly preparing a follow-up roadmap to boost the stock market, including legislation to mandate treasury stock cancellation, expansion of cumulative voting, and support for the growth of the defense industry."