[Good Morning Stock Market] US Stocks Plummet on Capital Gains Tax Hike Concerns... "Domestic Market Continues Sector-Differentiated Trend"

[Image source=Yonhap News]

[Asia Economy Reporter Park Jihwan] The U.S. stock market closed lower overnight amid news of the Biden administration's plan to increase taxes on the wealthy. On the 22nd (local time), the Dow Jones Industrial Average closed at 33,815.90, down 321.41 points (0.94%) from the previous session. The Standard & Poor's (S&P) 500 index fell 38.44 points (0.92%) to 4,134.98, and the tech-heavy Nasdaq index dropped 131.80 points (0.94%) to 13,818.41. Major indices, which had maintained slight gains early in the session supported by strong earnings from key companies, sharply declined following news of a doubling of the capital gains tax for high-income earners.

Market experts expect that while the decline in the U.S. market will have some impact on the domestic market, stock-specific trends driven by individual company issues and earnings will be more pronounced.

◆ Seo Sangyoung, Researcher at Mirae Asset Securities = The U.S. stock market's decline in the latter part of the session due to the Biden administration's tax increase plan is a burden. However, considering that this was already known from Treasury Secretary Yellen's remarks on the 24th of last month, the impact is expected to be limited.

However, the weakness shown by Micron (-5.34%) and Intel (-1.77%) after their after-hours earnings announcements is expected to increase profit-taking desires. The Korean stock market is expected to start lower and then undergo a process of absorbing selling pressure, with continued stock differentiation driven by the climate summit and individual company earnings announcements.

◆ Kim Yumi, Economist at Kiwoom Securities = On this day, the Korean stock market is expected to start lower, centered on the semiconductor sector, followed by sectoral differentiation. Semiconductor stocks, including Micron (-5.34%), Nvidia (-3.32%), AMD (-3.13%), and TSMC (-1.77%), showed simultaneous weakness due to concerns over increased inventory at client companies. Considering that Intel (-1.77%) also fell nearly 3% in after-hours trading following its earnings announcement, this is expected to weigh on related sectors and index gains. However, since the adjustment factors in the U.S. market are largely supply-demand related, the domestic market is expected to show differentiated flows by sector.

◆ Choi Yujun, Researcher at Shinhan Financial Investment = The domestic market showed intensified sectoral divergence yesterday. Heavy and sensitive stocks and defensive sectors such as telecommunications, insurance, and utilities rose. In particular, foreign investors continued selective responses to specific sectors. They focused on buying sectors with higher earnings visibility rather than the overall index. Given that noise related to semiconductor supply remains, this trend is likely to continue for some time. Attention should be paid to the climate summit scheduled for the 22nd-23rd and the ongoing earnings season of major domestic companies.

This content was produced with the assistance of AI translation services.