[Good Morning Stock Market] KOSPI Expected to Open Lower on 'Oracle Shock'... Recovery Attempt Anticipated on Micron's Strong Performance

On December 18, the Korean stock market is expected to open lower in the morning, influenced by the sharp decline in U.S. artificial intelligence (AI) stocks triggered by Oracle the previous day. However, Micron's strong after-hours performance is likely to have a positive impact on the domestic semiconductor sector.

On December 17 (local time), the technology-heavy Nasdaq Index closed at 22,693.323, down 418.139 points (1.81%) from the previous session in the New York stock market. The large-cap S&P 500 Index fell 78.83 points (1.16%) to 6,721.43, while the blue-chip Dow Jones Industrial Average ended down 228.29 points (0.47%) at 47,885.97. The small- and mid-cap Russell 2000 Index also declined by 1.08%.

The sharp drop in the New York stock market was triggered by negative news about Oracle. The Financial Times (FT) of the UK reported that private equity firm Blue Owl Capital decided not to fund a $10 billion, 1-gigawatt (GW) data center construction project in Michigan for OpenAI, which had been under discussion with Oracle. In addition, prior reports suggested that Oracle might delay the completion of some OpenAI-related projects to 2028, further cooling investor sentiment. Oracle's stock price plunged more than 5% that day.

Other AI-related stocks also could not avoid a simultaneous decline. Broadcom dropped 4.48%, AMD fell 5.29%, and Nvidia was down 3.81%. The market now assesses that AI investments, previously seen as having "unlimited expansion potential," have entered a phase where debt, profitability, and construction delay risks are being carefully considered. Seo Sangyoung, a researcher at Mirae Asset Securities, analyzed, "In the past, capital expenditure (CAPEX) expansion was seen as an unconditional positive, but now AI industry investment is shifting from simple expansion to a stage of efficiency verification, so there will be more discernment between individual stocks."

The employment market also added to the uncertainty. In November, U.S. nonfarm payrolls increased by 64,000, exceeding expectations, but the unemployment rate rose to 4.6%, the highest in four years and two months. Amid growing doubts about the future path of benchmark interest rates, Christopher Waller, a member of the U.S. Federal Reserve Board of Governors, mentioned the need for further rate cuts but maintained a cautious stance, saying, "There is no need to rush."

On this day, the KOSPI is expected to open lower in the morning, reflecting the impact of the sharp decline in AI-related stocks centered on Oracle. However, Micron's strong performance is expected to offset this, with the market likely to recover some of its losses toward the end of the session. Micron surged nearly 8% in after-hours trading after reporting results that far exceeded market expectations.

Lee Sunghoon, a researcher at Kiwoom Securities, said, "Attention should also be paid to U.S. President Donald Trump's national address scheduled for 11 a.m. Korean time today," adding, "President Trump, who has recently struggled with approval ratings falling to the 30% range due to concerns over high inflation and economic slowdown, is expected to emphasize his achievements in the economic sector and announce key national policy tasks for next year in an effort to turn public opinion around."