[Good Morning Market] New York Rebounds on Withdrawal of Greenland Tariffs... Will KOSPI Attempt to Break 5,000?

The New York Stock Exchange rebounded. Investor sentiment recovered quickly after U.S. President Donald Trump withdrew his plan to impose the "Greenland tariffs." On January 22, the domestic stock market is expected to attempt to break through the 5,000-point level, buoyed by the rebound in the U.S. market.

AFP Yonhap News

On the 21st (local time) at the New York Stock Exchange, the Dow Jones Industrial Average closed at 49,077.23, up 588.64 points (1.21%) from the previous trading day. The S&P 500 Index, focused on large-cap stocks, rose 78.76 points (1.16%) to 6,875.62, while the technology-heavy Nasdaq Index finished at 23,224.825, up 270.502 points (1.18%).

The easing of tensions between the United States and Europe is cited as the reason for the rebound. The United States established the basic framework for a future agreement with the North Atlantic Treaty Organization (NATO) regarding the annexation of Greenland. In addition, it decided to withdraw plans to impose tariffs on Europe.

President Trump stated through the social networking service Truth Social, "I had a very productive meeting with Mark Rutte, NATO Secretary General," and added, "We have established the basic framework for a future agreement regarding Greenland and the entire Arctic region." He also explained, "We have decided not to impose tariffs that were scheduled to take effect from February 1."

Lee Sunghoon, a researcher at Kiwoom Securities, said, "The extreme volatility in the U.S. stock market in response to each of Trump's remarks demonstrates the market's heightened sensitivity to Trump's tariffs," and added, "It is important to keep in mind that additional geopolitical and tariff-related issues may cause further volatility in the financial markets going forward."

Despite the sharp decline in the U.S. stock market the previous day, the KOSPI rose as buying interest flowed into large-cap stocks led by Samsung Electronics and Hyundai Motor. A positive trend is also expected today, following the U.S. rebound. Lee added, "With Trump withdrawing the Greenland tariffs and the Philadelphia Semiconductor Index surging, led by Micron, the KOSPI is expected to attempt to break through the 5,000-point level, especially centered on the semiconductor sector."

If the KOSPI surpasses 5,000 points, a sector rotation market is expected to emerge. He projected, "After the KOSPI breaks through the 5,000-point level, the market will likely enter a consolidation phase that alleviates concentration and overheating pressures," and added, "Given the ample liquidity conditions, funds are expected to rotate into relatively neglected stocks as the market cools down."