[Good Morning Stock Market] US Market Rally Hits Peak... "Domestic Market Also Affected... Expected to Start Lower"

[Image source=Yonhap News]

[Asia Economy Reporter Park Ji-hwan] The U.S. New York stock market closed lower across the board. The three major indices, which had continued to hit record highs until the previous day, ended the session weak due to factors such as rising inflation and fatigue at peak levels.

On the 9th (local time), the Standard & Poor's (S&P) 500 index closed at 4,685.26 points, down 16.45 points (0.35%) from the previous day. The Dow Jones Industrial Average fell 112.24 points (0.31%) to close at 36,319.98. The tech-heavy Nasdaq index dropped 95.81 points (0.60%) to 15,886.54.

All three major indices, which had reached record highs until the previous day, turned downward. In particular, the S&P 500 ended its eight-day streak of record highs. Among individual stocks, Tesla plunged 12%, marking its largest single-day drop in 14 months since September last year.

The domestic stock market is also expected to be weak on the same day. With investment sentiment still unimproved and a stock-specific market expected, there are forecasts that the electric vehicle-related sector may underperform due to the impact of Tesla's sharp decline.

◆ Seo Sang-young, Researcher at Mirae Asset Securities = The overnight decline in the U.S. stock market due to supply-demand factors and increased volatility in individual companies is expected to have a negative impact on the Korean stock market. In particular, Tesla's sharp drop and the underperformance of other electric vehicle-related stocks are expected to weigh on related sectors, which is also negative.

Generally, in the absence of clear change factors, the period of increased volatility due to supply-demand factors is lengthening. The fact that market participants' active market responses are expected to be limited is also a burden.

The Korean stock market is expected to start lower and continue with a stock-specific market. Especially, the release of China's inflation data earlier in the day followed by the U.S. consumer price index in the evening is a factor limiting active responses. This is because the results could increase volatility in the bond and foreign exchange markets. Market participants tend to take a step back and watch rather than respond actively, which is also a factor for a stock-specific market.

◆ Han Ji-young, Researcher at Kiwoom Securities = The current U.S. stock market shows accumulated price pressure and fatigue due to consecutive record highs. The sharp correction in some large tech stocks such as Tesla (-12.0%) in the previous trading day is largely seen as profit-taking triggered by individual negative factors. Furthermore, since the U.S. stock market is currently showing increased differentiation and concentration among sectors, it is necessary to pay attention to the increased volatility caused by changes in sector and stock positions by market participants following these trends for the time being.

The domestic stock market is expected to be influenced by the weak U.S. stock market and October U.S. consumer inflation expectations. Since the domestic stock market's price rise has been modest compared to the U.S. market, the downward pressure on the domestic market caused by the weak U.S. market due to profit-taking is expected to be limited.

The index is expected to continue a strong but narrow trading range, but sectoral differentiation based on individual factors is expected to continue following the previous trading day. In this context, considering the significant price adjustment of Tesla in the U.S. market on the previous trading day, attention should be paid to increased price volatility in domestic electric vehicle and secondary battery-related stocks as well.

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