[Good Morning Market] Micron Soars in U.S....KOSPI Expected to See Divergent Trading

Semiconductors Take the Lead Amid Big Tech Weakness
Trickle-Down Boost Expected for K-Semiconductors

As the share price of Micron Technology in the United States jumped 10%, the domestic stock market is also expected to see gains centered on a small number of stocks such as semiconductor shares.

On the morning of the 11th, the KOSPI is displayed on the status board in the dealing room at Hana Bank's head office in Jung-gu, Seoul. Photo by Yonhap News

On the 11th (Eastern Time in the United States), the Dow Jones Industrial Average on the New York Stock Exchange (NYSE) closed at 50,121.40, down 66.74 points (0.13%) from the previous session.The S&P 500 Index ended at 6,941.47, down 0.34 points (0.00%) from the previous session, and the Nasdaq Composite Index closed at 23,066.47, down 36.01 points (0.16%).

However, the Philadelphia Semiconductor Index, which consists of artificial intelligence (AI) and semiconductor-related stocks, surged more than 2%. The Philadelphia Semiconductor Index has rebounded by nearly 10% over the last four trading days. Nvidia and Broadcom ended only slightly higher, but TSMC, Lam Research, Applied Materials, KLA, and Intel all rose by around 3%. Micron jumped 10% after stating that it has been supplying its High Bandwidth Memory (HBM)4 to Nvidia without any issues.

By sector, energy climbed more than 2%, while materials and consumer staples also gained more than 1%. In contrast, financials fell 1.5% again on the day. Share prices of asset management and financial services companies declined sharply for the second consecutive day, as the impact from technology platform Altruist's launch of an AI-based tax management tool continued.

Big Tech (large information technology companies) shares were generally weak. Microsoft (MS) and Alphabet fell more than 2%, and Amazon also dropped 1.39%. Among the detailed industry indices, the Dow Jones U.S. Computer Services Index recorded the steepest decline, plunging 6.04%. Its components include Microsoft, Oracle, ServiceNow, IBM, and Salesforce.

Nonfarm payrolls in January came in at almost twice the market forecast. The U.S. Department of Labor announced that January nonfarm payrolls increased by 130,000 from the previous month. The market consensus had been an increase of 70,000. The unemployment rate also came in at 4.3%, down 0.1 percentage point from the prior month. However, there remained a prevailing view that investors could not be complacent, as downward revisions to previous nonfarm payroll figures have been repeatedly occurring and many indicators are still pointing to a slowdown in employment. In addition, concerns over the market being at a high level added to the pressure, triggering a wave of selling.

According to the CME FedWatch Tool of the Chicago Mercantile Exchange (CME), the federal funds futures market priced in a 93.0% probability of the Federal Reserve keeping rates unchanged in March. As employment improved significantly, this probability jumped from 79.9% near the previous day's close. The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) closed at 17.65, down 0.14 points (0.79%) from the previous session.

Han Ji-young, a researcher at Kiwoom Securities, said, "In today's domestic stock market, higher interest rates and a stronger dollar driven by the U.S. employment surprise, along with ongoing concerns over the profitability of companies such as Alphabet and Microsoft, could act as headwinds," but added, "The news of Micron's share price soaring could serve as a unique positive catalyst for Samsung Electronics and SK Hynix."