[Good Morning Market] KOSPI Attempts to Hold 3,200 Ahead of South Korea-U.S. Summit

Domestic Stock Market Ends Lower Last Week
Profit-Taking Triggered by Caution Ahead of Jackson Hole Speech
Nvidia Earnings Announcement This Week, Spotlight on Semiconductor Stocks

Last week, both the KOSPI and KOSDAQ ended with significant declines. This week, key events such as Nvidia’s earnings announcement, the South Korea-U.S. summit, and the Bank of Korea’s Monetary Policy Board meeting are scheduled, drawing attention to the possibility of a rebound in the domestic stock market.

The KOSPI fell by 1.76% over the past week, closing at 3,168.73. The KOSDAQ index retreated by 4.02%, ending at 782.51. These declines were driven by profit-taking following heightened caution ahead of Federal Reserve Chair Jerome Powell’s speech at Jackson Hole last week. Additionally, concerns about an artificial intelligence (AI) bubble, particularly in the United States, negatively affected stock prices.

Yonhap News

However, during his Jackson Hole speech on the 22nd (local time), Chair Powell delivered more dovish (monetary easing-oriented) remarks than expected, hinting at the possibility of a rate cut. He noted that downside risks in the labor market are increasing, and that this shift in the balance of risks could justify policy adjustments, thereby raising the likelihood of a rate cut in September.

Furthermore, Powell assessed that inflation caused by tariffs would be a one-off shock, which led to an immediate reaction in the U.S. stock market. After a nearly 3% correction during the week due to caution around Jackson Hole, U.S. stocks recovered most of their losses by the end of the week.

As the domestic stock market is expected to be influenced by the outcome of the Jackson Hole speech, attention is now focused on the summit between President Lee Jaemyung and U.S. President Donald Trump, scheduled for the 25th (local time). At the South Korea-U.S. summit, follow-up discussions on tariff negotiations are expected, along with talks on industrial cooperation such as the MASGA project, nuclear power generation, and LNG projects.

Another point of interest is whether negotiations on tariff rates for individual items such as semiconductors and pharmaceuticals will be included on the agenda. Last week, there was controversy over an unfair contract between Korea Hydro & Nuclear Power and Westinghouse, and whether the two leaders will discuss nuclear power cooperation at the summit is expected to determine the short-term stock price direction of nuclear power stocks, which are leading the domestic market.

In addition, Nvidia’s earnings announcement on the 28th is expected to be a key variable for stock prices. Previously, OpenAI CEO Sam Altman pointed out that investors have excessive expectations for AI, which has contributed to the recent weakness in tech stocks. Furthermore, a report by MIT researchers questioning the returns on AI investments has caused related stocks to falter. Nvidia’s earnings are expected to serve as a critical test of whether the AI boom will continue.

Han Jiyoung, a researcher at Kiwoom Securities, said, “With the Federal Reserve event at Jackson Hole now concluded, the market’s focus is expected to shift to Nvidia’s earnings. Since Nvidia’s results will affect domestic semiconductor stocks such as SK hynix and Samsung Electronics, it is anticipated that these corporate earnings events will be at the center of the stock market later in the week.”