[Good Morning Stock Market] Sectoral Differentiation Expected Amid Wait-and-See Sentiment on Korea-US Tariff Talks

Tesla Rises 3.02% on AI Chip Deal with Samsung Electronics
"Attention on Fed Chair Powell's Comments Regarding Interest Rates"

As the United States has consecutively concluded tariff agreements with Japan and the European Union (EU), on July 29, the Korean stock market is expected to show sectoral differentiation amid a wait-and-see sentiment regarding Korea-US negotiations.

On the 28th (local time), traders are working at the New York Stock Exchange in the United States. Photo by Getty Images Yonhap News

On July 28 (local time), the three major indices of the New York stock market closed mixed within a narrow range. Despite the previous day's news of a trade agreement between the United States and the EU, the market showed a limited response. The Dow Jones Industrial Average, which focuses on blue-chip stocks, closed at 44,837.56, down 64.36 points (0.14%) from the previous session. The S&P 500 index, which centers on large-cap stocks, rose 1.13 points (0.02%) to 6,389.77, while the tech-heavy Nasdaq index climbed 70.27 points (0.33%) to 21,178.58, reaching an all-time high.

By stock, Tesla surged 3.02% on news of an artificial intelligence (AI) chip contract with Samsung Electronics. Ahead of earnings announcements by major big tech companies, the rising demand for AI technology had a positive effect, with Nvidia, the leading AI chip stock, gaining 1.87%. Meta, the parent company of Facebook, rose 0.69%. Microsoft (MS) and Alphabet, the parent company of Google, fell by 0.24% and 0.34%, respectively.

With the United States reaching agreements with the EU following Japan, concerns over a tariff war have somewhat eased. US President Donald Trump stated that for countries that have not yet signed an agreement, "the tariff will probably be either 15% or 20%, one of the two." The US Federal Reserve (Fed) will hold a regular Federal Open Market Committee (FOMC) meeting on July 30 to determine the benchmark interest rate, which is currently at 4.25-4.5% per annum.

Kim Seokhwan, a researcher at Mirae Asset Securities, said, "The market showed a limited response to the news of the trade agreement between the US and the EU," and added, "Market attention is focused on comments from Fed Chair Jerome Powell, which could provide clues about the possibility of a rate cut in September. Discussions on extending the tariff suspension between the US and China have been ongoing for two days, and the outcome is also drawing attention."

Regarding the Korean stock market on this day, Han Jiyoung, a researcher at Kiwoom Securities, said, "Amid a wait-and-see sentiment regarding Korea-US negotiations, individual company earnings, such as Hanwha Ocean (042660) and Korea Aerospace Industries (047810), Samsung Electronics' foundry order momentum related to Tesla, and individual issues such as the sharp drop in China's lithium carbonate futures prices, are expected to continue driving sectoral differentiation."

She added, "This month, rotational trading has frequently occurred in the domestic market, and recently, there have been frequent shifts in leadership even among stocks within the same sector. The semiconductor sector, which has an absolute influence on the direction of the domestic stock market, is a representative example. Following the news of Samsung Electronics' order for Tesla AI chips the previous day, there has been a shift in leadership from SK Hynix back to Samsung Electronics."