[Good Morning Market] New York Stock Exchange Hits Record High... Will the KOSPI Rally Continue?

Domestic Stock Market Poised to Rise on Big Tech Momentum
Semiconductor Earnings Expectations Also Factored In

With technology stocks strengthening on expectations of strong earnings from big tech companies, the New York Stock Exchange closed at a record high, and the domestic stock market is expected to continue its upward trend. The KOSPI surged nearly 3% the previous day, achieving the 'Ocheonpi' milestone at the closing price, despite remarks by U.S. President Donald Trump that tariffs on Korean products would be reverted to pre-trade agreement levels.

On the 27th, officials are celebrating in the Woori Bank dealing room in Jung-gu, Seoul. Photo by Yonhap News Agency

On the 23rd (local time) at the New York Stock Exchange, the S&P 500 index rose 28.37 points (0.41%) to close at 6,978.60, setting a new all-time high. The tech-heavy Nasdaq Composite Index ended at 23,817.10, up 215.74 points (0.91%) from the previous session. The Dow Jones Industrial Average, which consists of 30 blue-chip stocks, closed at 49,003.41, down 408.99 points (-0.83%), mainly due to a sharp 19.61% drop in UnitedHealth.

Despite ongoing debates over an artificial intelligence (AI) bubble, anticipation of 'surprise earnings' ahead of major big tech earnings reports pushed up both the S&P 500 and Nasdaq indices. The 'Magnificent 7' (M7) stocks-Tesla, Microsoft, Meta, and others-are scheduled to announce their quarterly results after the market closes on the 28th. Apple is set to release its earnings on the 29th.

By sector, IT, utilities, and energy performed strongly, with the semiconductor sector standing out in particular. Memory maker Micron jumped 5.44%, equipment manufacturer Lam Research rose 7.00%, and storage device company Seagate climbed 3.8%. As a result, the Philadelphia Semiconductor Index rebounded 2.40%.

Seo Junghoon, team leader at Samsung Securities Research Center, stated in a report that "last night, the New York Stock Exchange continued its gradual upward momentum, successfully reaching new record highs," adding, "With major big tech earnings reports imminent, investor optimism has once again spread."

Since big tech earnings are directly linked to the direction of domestic semiconductor stock prices, the domestic market is also expected to gain upward momentum, especially among leading semiconductor stocks. With expectations for growth in the AI industry still valid, there is a strong possibility that additional gains will be attempted as foreign investors continue to buy in.

In fact, Samsung Electronics and SK hynix stock prices hit all-time highs the previous day ahead of this week's earnings announcements. Samsung Electronics closed at 159,500 won, up 4.87% from the previous session. SK hynix surged 8.70% to close at 800,000 won, recording its highest price ever. The sharp rise in SK hynix shares was attributed to news that it would be the sole supplier of high-bandwidth memory (HBM) for Microsoft’s latest AI chip, the Maia 200. This surge is analyzed as a result of strong buying driven by expectations ahead of the earnings releases of Samsung Electronics and SK hynix on the 29th.

However, the scheduled decision on the benchmark interest rate at the U.S. Federal Open Market Committee (FOMC) meeting in the early morning of the 29th, Korea time, could heighten some caution. The market expects the Federal Reserve to keep the benchmark rate unchanged. Attention is focused on what Federal Reserve Chair Jerome Powell will say regarding his future plans and the independence of the Fed.

Han Jiyoung, researcher at Kiwoom Securities, said, "Today, the domestic stock market is expected to start higher, buoyed by the strength of the U.S. Philadelphia Semiconductor Index and President Trump's conciliatory remarks," adding, "During the session, however, the market may shift to a rotational trend as January FOMC wait-and-see sentiment spreads and profit-taking pressure builds in sectors that surged the previous day."