[Good Morning Market] U.S. Stocks Rebound... Will KOSPI Aim for 3,900 Again?

U.S.-China Summit Date Confirmed, Raising Hopes for Easing Tensions
Korean Stock Market Expected to Rebound Amid Tech Sector Rally

The U.S. stock market rebounded on the back of news that a summit between the United States and China has been confirmed for the 30th, as well as expectations for third-quarter earnings releases. Buoyed by strong performances in U.S. artificial intelligence (AI) and semiconductor sectors, the KOSPI is also expected to make another attempt to surpass the 3,900 mark.

On the 23rd (local time) at the New York Stock Exchange, the S&P 500 index closed at 6,738.44, up 0.58% from the previous day. The tech-heavy Nasdaq Composite rose 0.89%, ending regular trading at 22,941.80. The Dow Jones Industrial Average climbed 0.31% to 46,734.61.

The White House announced that President Donald Trump will meet with Chinese President Xi Jinping on the 30th, which appears to have fueled hopes for easing U.S.-China tensions and prompted a positive reaction in the markets. President Trump is scheduled to hold a series of summits, including meetings with Japanese Prime Minister Sanae Takaichi on the 28th and President Lee Jaemyung on the 29th, after visiting Malaysia earlier in the week.

Given President Trump’s unpredictability, unexpected developments could arise right up until the U.S.-China summit, but for now, the market remains optimistic.

The U.S. government’s decision to place major Russian oil companies under sanctions led to a surge of more than 5% in West Texas Intermediate (WTI) crude oil futures prices, but this did not pose a significant burden. While rising oil prices could heighten inflation concerns, expectations for a resolution to U.S.-China trade tensions seem to have offset these worries.

Positive business outlooks among companies also served as a favorable factor. In Tesla’s case, third-quarter earnings fell short of expectations, and operating profit plunged 40% year-on-year, sparking controversy over profitability. However, the focus shifted to future value, such as news of mass production of driverless autonomous vehicles, leading to a 2.28% increase. Intel, which rose 3.36% during regular trading, saw its gross margin reach 40% after the market closed, resulting in a more than 7% gain in after-hours trading due to solid earnings. Amazon climbed 1.44% after Morgan Stanley projected that the company could save up to $4 billion annually through robotics transformation.

The domestic stock market is also expected to benefit from the positive momentum in the U.S. Already, the MSCI Korea ETF, which closely tracks the local market, rose 0.39%. The Philadelphia Semiconductor Index also gained 0.87%.

Han Jiyoung, a researcher at Kiwoom Securities, stated, "The strength of U.S. AI and semiconductor stocks will bolster domestic semiconductor shares, and the KOSPI will once again challenge the 3,900 mark." She added, "The September Consumer Price Index (CPI), which was delayed due to the U.S. government shutdown, will be released tonight. Unless the figure is shockingly high, it is unlikely to significantly affect the Federal Open Market Committee’s (FOMC) decision on a rate cut in October."