[Good Morning Market] US Stocks Mixed... KOSPI 5000 Expected to See Tug-of-War

Big Tech Earnings and Next Fed Chair Nomination in Focus
Domestic Leaders in Semiconductors and Automobiles to Announce Results
Tug-of-War Expected Over the KOSPI 5000 Mark

Last week, the New York stock market showed a mixed trend due to Iran-related geopolitical uncertainty and a sharp decline in Intel shares. As the Federal Open Market Committee (FOMC) meeting and major big tech (large information technology companies) earnings announcements are scheduled for this week, a wait-and-see attitude is expected. Similarly, the domestic stock market is anticipated to attempt to settle above the KOSPI 5000 mark as major events, including earnings releases from leading companies such as Samsung Electronics, SK Hynix, and Hyundai Motor, are concentrated in the latter half of the week.

On the 23rd (local time) at the New York Stock Exchange, the S&P 500 index closed at 6,915.61, up 0.03% from the previous day. The tech-heavy Nasdaq index also rose 0.28% to finish at 23,501.24. The Dow Jones Industrial Average closed at 49,098.71, down 0.58% from the previous day.

All three major indices opened lower as investors grew more cautious following news that U.S. President Donald Trump announced that a large U.S. military fleet was heading toward Iran as a contingency measure. Later, bargain hunting led to a rebound in the Nasdaq index.

The market is focusing on major earnings announcements, the nomination of the next Federal Reserve (Fed) chair, and the FOMC this week. At the FOMC meeting to be held on the 27th and 28th, the market is almost certain that rates will remain unchanged this month, so attention to the rate decision itself is low, but Jerome Powell’s comments after the meeting are expected to draw significant attention.

The nomination of the next Fed chair, scheduled to be announced this week, is expected to attract the most attention. The choice of the next Fed chair could bring changes to the expected policy path of the FOMC and the Fed next month. Currently, the candidates have been narrowed down to two: Rick Rieder, Chief Investment Officer (CIO) of Global Fixed Income at BlackRock, who is known for his pragmatic approach, and Kevin Warsh, former Fed Governor, who is considered a policy hawk.

Earnings announcements from big tech companies such as Microsoft, Meta, Tesla, and Apple are also in the spotlight. As of the 23rd, returns for Nvidia (-4.5%), Microsoft (-6.05%), Apple (-9.3%), and Tesla (-6.8%) have all underperformed the S&P 500 index (-0.7%) since the beginning of the year. This is seen as a result of ongoing concerns about profitability that have been prominent since last November. The upcoming earnings releases are expected to reveal whether companies will address cost burdens, improvements in operating margins, and upward revisions to capital expenditure targets.

This is directly linked to the share price trends of domestic semiconductor and robotics stocks, so the domestic market is also likely to adopt a wait-and-see stance ahead of big tech earnings announcements. In addition, leading companies such as Samsung Electronics, SK Hynix, Hyundai Motor, and Kia are scheduled to announce their fourth-quarter results for last year. As these companies led the KOSPI to reach 5,000, changes in market expectations will likely determine their sustainability as market leaders.

Han Jiyoung, a researcher at Kiwoom Securities, analyzed, "Since semiconductor stocks have already seen sharp price increases this year, with expectations for last year’s fourth-quarter earnings already priced in, it is important to pay attention to the earnings conference calls of these two companies. As automobile stocks have recently emerged as new market leaders and are facing short-term peak concerns, it is also important to focus on the concrete roadmap for their robotics businesses and plans for shareholder returns."