[Good Morning Market] New York Stocks Rebound After Overcoming Headwinds... Korean Market Also Expected to Recover

Positive Momentum from U.S. Micron Boosts Major Big Tech Stocks
Domestic Market Also Expected to Recover

The U.S. stock market rebounded as the Consumer Price Index (CPI) came in below market expectations and bargain hunting in artificial intelligence (AI)-related stocks increased. The domestic stock market is also expected to recover the previous day's sharp losses amid a sense of relief.

On December 18 (local time) at the New York Stock Exchange, the S&P 500 index closed at 6,774.76, up 0.79% from the previous day. The tech-focused Nasdaq index also rose 1.38% to finish at 23,006.36. The Dow Jones Industrial Average increased by 0.14%, closing at 47,951.85.

This is attributed to growing expectations for a Federal Reserve interest rate cut, as the November CPI growth rate fell short of forecasts. In addition, Micron Technology, which reported a record-breaking earnings surprise and surged more than 10%, led the upbeat sentiment. AI-related stocks such as Nvidia (1.8%), Broadcom (1.2%), and Alphabet, Google's parent company (1.9%), all posted strong gains, helping the market recover from the previous day's sharp decline.

However, controversy over the distortion of the newly released CPI data caused volatility during trading. The Nasdaq index dropped by 1 percentage point within 30 minutes during the session. Data for October excluding energy and housing costs, such as food and clothing, were not provided at all due to the U.S. government shutdown, and the housing cost increase rate-which had been keeping inflation elevated-was assumed to be 0%, shaking market confidence. As a result, there are predictions that market sensitivity to the December CPI, scheduled to be released next month, may increase further.

Meanwhile, international oil prices rose. Buying interest was attributed to heightened uncertainty over oil supplies from Russia and Venezuela. On this day at the New York Mercantile Exchange, West Texas Intermediate (WTI) crude for January delivery rose 0.38% to $56.15 per barrel. Brent crude on the London ICE Futures Exchange also climbed 0.2% to $59.82.

The domestic stock market is also expected to rebound, buoyed by positive factors stemming from Micron. Although a Bank of Japan (BOJ) meeting is scheduled during the session, several prior indications of a rate hike have already been made, and the market is prepared, so the impact is expected to be limited.

The MSCI Korea ETF, which moves similarly to the domestic stock market, rose 1.68%. The MSCI Emerging Markets ETF and the Philadelphia Semiconductor Index also climbed 1.14% and 2.51%, respectively.

Han Ji-young, a researcher at Kiwoom Securities, said, "As Micron emphasized, there is a strong possibility that both next year's high-bandwidth memory (HBM) and legacy semiconductor market conditions will remain favorable for a considerable period," adding, "Upward revisions to earnings estimates for domestic semiconductor stocks are likely to continue."