[Good Morning Market] US Stock Market Pauses Amid Rising Treasury Yields... "Korean Market Likely to Take a Breather Too"

Focus on the Results of the Morning US-China Summit

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Ji-hwan Park] Overnight, the U.S. New York stock market closed slightly lower as Treasury yields rose and profit-taking occurred mainly in tech stocks. The domestic market, which had seen significant gains since late last week, is expected to decline due to profit-taking by investors influenced by the U.S. market. Particularly, attention is drawn to the results of the U.S.-China summit scheduled for the morning.

On the 15th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average fell 12.86 points (0.04%) from the previous close to 36,087.45. The Standard & Poor's (S&P) 500 index dropped 0.05 points (0.00%) to 4,682.80, and the tech-heavy Nasdaq index closed down 7.11 points (0.04%) at 15,853.85.

◆ Ji-young Han, Kiwoom Securities Researcher=With expectations of easing supply shortages already priced in, the domestic market, which had posted gains of over 1% for two consecutive trading days, is expected to enter a consolidation phase centered on growth and large-cap stocks as it absorbs short-term profit-taking amid anticipation of external events.

During the day, the market is expected to be influenced by the outcome of the U.S.-China summit. The main discussion points are likely to focus on diplomacy and human rights. Trade issues, which are highly sensitive to the market, are expected to be limited to confirming the implementation of existing trade agreements. Meanwhile, after market close, President Biden signed a $1 trillion infrastructure investment bill. Although this has been reflected in stock prices since last week, the expectation of actual execution of infrastructure investment is expected to support the market's downside today.

◆ Sang-young Seo, Mirae Asset Securities Researcher= The KOSPI is expected to open down about 0.3%. The U.S. market started higher, led by metaverse-related stocks such as Meta Platforms and stocks with positive news like Boeing, which had shown strength last Friday. However, as Treasury yields rose during the session, profit-taking mainly in tech stocks emerged, turning the market lower. Notably, profit-taking occurred mainly in stocks that had recently experienced rapid gains.

The U.S. market is showing a stock-specific trend influenced by individual stock issues, and the recent weakness in some tech stocks, which had seen an expanded rise due to rising Treasury yields, is a burden. Considering the significant gains in the Korean market since late last week, this is expected to stimulate profit-taking. Additionally, some metaverse-related stocks have broken away from their upward trend, suggesting changes in related stocks in the Korean market as well. Taking this into account, the Korean market is expected to show changes after the U.S.-China summit results in the morning amid a stock-specific market environment.

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