[Good Morning Market] US Large-Cap and Tech Stocks Rally, Korea Pauses Amid Trade Uncertainty

The New York Stock Exchange saw strong gains led by large-cap and technology stocks, driven by Alphabet's robust earnings and heightened expectations for artificial intelligence (AI) investments. Meanwhile, on July 25, the Korean stock market is expected to remain in a wait-and-see mode due to the fallout from failed tariff negotiations.

Yonhap News

On July 24 (local time), the S&P 500 index, which is centered on large-cap stocks, closed at 6,363.35, up 4.44 points (0.07%) from the previous session. The tech-heavy Nasdaq index finished at 21,057.96, up 37.94 points (0.18%). Both indexes broke their all-time highs for the fourth and second consecutive sessions, respectively. However, the Dow Jones Industrial Average, which focuses on blue-chip stocks, underperformed, falling 316.38 points (0.7%) to 44,693.91.

The MSCI Korea ETF and the MSCI Emerging Markets ETF, both closely linked to the Korean stock market, declined by 0.73% and 0.54%, respectively. The Philadelphia Semiconductor Index rose by 0.12%.

The market's attention was focused on Alphabet's second-quarter "earnings surprise." Alphabet reported revenue of $96.43 billion and earnings per share (EPS) of $2.31, both exceeding market expectations (revenue of $94 billion, EPS of $2.18). Boosted by AI optimism, Alphabet's share price rose by 0.88%. Major technology stocks such as Nvidia (1.73%), Microsoft (0.99%), and Meta, Facebook's parent company (0.17%), also continued to perform strongly. In contrast, Tesla, which had disappointed with its previous day's earnings, plunged by 9.11%, while IBM also fell by 7.62%, highlighting a clear divergence in performance.

Regarding trade negotiations, news emerged that the United States and the European Union were close to reaching an agreement to impose 15% reciprocal tariffs, which served as an additional positive factor. There was also discussion of significantly lowering tariffs on automobiles from the current 27.5% to 15%, fueling expectations of easing trade tensions and supporting stock prices.

Labor market indicators remained solid. According to the U.S. Department of Labor, initial jobless claims last week totaled 217,000, marking a decline for the sixth consecutive week and the longest such streak since 2022.

The Korean stock market, which gave up earlier gains the previous day after Korea-U.S. trade talks fell through, is expected to continue to see subdued investor sentiment today. Kim Ji-won, a researcher at KB Securities, analyzed, "Expectations for tariff negotiations have turned into anxiety, which is now reflected in the market trend. With no additional upward momentum, a wait-and-see approach is likely for the time being. The key will be whether tariff negotiations resume quickly."