[Good Morning Stock Market] Nvidia Soars, US Default Concerns... KOSPI Expected to Start Flat

In last night's US stock market, semiconductor company Nvidia's stock price soared, leading AI-related stocks to show strength. However, uncertainty surrounding the US government's debt ceiling negotiations persisted, resulting in a differentiated market where most stocks fell except for some, and the market closed mixed. On the 26th, the KOSPI index is expected to start flat.

On the previous day (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average fell 35.27 points (0.11%) from the previous close to close at 32,764.65. The Standard & Poor's (S&P) 500 index rose 36.04 points (0.88%) to 4,151.28, and the Nasdaq index closed at 12,698.09, up 213.93 points (1.71%) from the previous close.

The main issues in the US stock market that day were delays in debt ceiling negotiations, a downgrade warning on the US sovereign credit rating by credit rating agency Fitch, and Nvidia's 24% surge.

The so-called 'X-date,' when the US government's cash reserves run out, is only six days away. Concerns are growing that the debt ceiling will not be raised or suspended before the deadline, but the possibility of a last-minute deal remains. In the late session, US President Joe Biden stated, "There will be no default," causing the Dow Jones index to rebound temporarily, but the extent was limited.

On the contrary, international credit rating agency Fitch included the US sovereign credit rating outlook in the 'negative watch' the previous day, which acted as a negative factor for the stock market. Being on the negative watch means an increased risk of a credit rating downgrade, signaling a warning that the US credit rating could be downgraded.

Amid this, Nvidia rose 24.37%, approaching a market capitalization of $1 trillion. Nvidia, considered a representative beneficiary of the recently surging demand related to AI, presented second-quarter sales guidance that was a whopping 50% higher than market expectations. As expectations for AI industry growth increased, other semiconductor companies such as AMD and Micron also rose by 11.16% and 4.63%, respectively. The Philadelphia Semiconductor Index surged by as much as 6.81%.

However, the fact that only some AI-related stocks showed strength while most other stocks declined is expected to weigh on the domestic stock market. Seo Sang-young, head of the Media Content Division at Mirae Asset Securities, pointed out, "The delay in the US debt ceiling negotiations, which has heightened default concerns, could act as a factor dampening investor sentiment," adding, "The warnings from major credit rating agencies regarding the US credit rating also remain a burden." He further added, "Ahead of the holiday, the Korean stock market is expected to start flat and remain cautious, with individual stock movements continuing as seen the previous day."

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