[Good Morning Stock Market] US Stocks Cheer Inflation Slowdown... KOSPI Expected to Start Up 0.5%

At the end of last month, U.S. inflation indicators showed a downward stabilization trend, leading to a broad rise in the U.S. stock market. The solar power and electric vehicle sectors demonstrated clear strength. On the 3rd, the domestic KOSPI is also expected to start with an increase of around 0.5%.

[Image source=Yonhap News]

On the 31st (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 33,274.15, up 415.12 points (1.26%) from the previous session. The Standard & Poor's (S&P) 500 index closed at 4,109.31, up 58.48 points (1.44%), and the Nasdaq index closed at 12,221.91, up 208.44 points (1.74%). Notably, the Nasdaq index rose 16.8% during the first quarter since the beginning of the year. This quarterly increase is the largest since the second quarter of 2020.

The broad rise in the U.S. stock market that day was due to news that the core Personal Consumption Expenditures (PCE) price index, a preferred inflation gauge by the Federal Reserve (Fed), had slowed down. According to the U.S. Department of Commerce, the core PCE price index excluding volatile energy and food rose 4.6% in February compared to the same period last year. This was a slight slowdown from the experts’ forecast and the previous month’s figure of 4.7%.

Additionally, ahead of the earnings season, positive news centered on major companies was delivered, and the decline in Treasury yields along with the announcement of detailed provisions of the Inflation Reduction Act (IRA) boosted the solar power and electric vehicle sectors. Tesla surged 6.24% despite news of a recall related to semi-truck brake modules. It is interpreted that the increased expectations for tax benefits related to the detailed IRA guidelines played a key role. Related battery and charging sectors such as Rivian (7.50%), QuantumScape (5.82%), and ChargePoint (5.23%) also showed concurrent upward trends.

The domestic stock market is also expected to start with an increase of around 0.5% that day. Seo Sang-young, head of the Media Content Division at Mirae Asset Securities, said, "The U.S. stock market showed strength mainly in technology stocks due to falling inflation, and the inflow of positive corporate news is expected to have a positive impact on the Korean stock market as well." However, he added, "Concerns about possible regulations by the Chinese government on Micron are a burden," and "Due to the U.S. economic slowdown and continued decline in Korean exports, the market is expected to go through a process of digesting sell-offs."

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