[Good Morning Market] "Semiconductors Taking a Breather... Index Upside Limited"

Memory Peak-Out Concerns Sparked by Seagate CEO's Remarks
NVIDIA Earnings and U.S.-Iran Talks as This Week's Key Variables

As the U.S. stock market closed mixed due to profit-taking in semiconductor stocks, volatility in supply and demand is expected to increase in the Korean stock market on May 19, especially in the semiconductor sector. However, factors such as the scheduled U.S.-Iran talks during the week and NVIDIA's upcoming earnings announcement are seen as variables that could provide support on the downside.

On the 18th (local time), the three major U.S. indices ended the session with a mixed performance. At the New York Stock Exchange (NYSE), the Dow Jones Industrial Average (Dow Jones) closed at 49,686.12, up 159.95 points (0.32%) from the previous trading day. The S&P 500 index, which focuses on large-cap stocks, decreased by 5.45 points (0.07%) to 7,403.05, while the tech-heavy Nasdaq index dropped by 134.411 points (0.51%) to 26,090.734.

A trader is working at the New York Stock Exchange. Photo by AFP News Agency

On this day, the CEO of U.S. data storage company Seagate commented at the JP Morgan conference that "it takes a long time to bring in new factories and new equipment," which sparked concerns about the memory sector having reached its peak (peak-out). As a result, Seagate plunged by about 7%, and competitor Micron Technology also fell by around 6%. Western Digital declined by 4.8%, SanDisk by 5.3%, NVIDIA by 1.37%, and Broadcom by 1.05%.

Han Ji-young, a researcher at Kiwoom Securities, said, "Concerns about shipment limitations due to supply constraints and a peak-out in the growth trend have come to the forefront," adding, "The burden from rising U.S. 10-year Treasury yields appears to have triggered a sharp drop in semiconductor stocks, which had previously enjoyed several rallies."

The main focus for the domestic stock market today is the trend of semiconductor stocks. Temporary expansion of supply and demand volatility centered on semiconductors is likely to limit the upward range of the index.

The researcher commented, "Major semiconductor stocks at home and abroad are currently experiencing profit-taking pressure due to the burden of their rapid advance," and added, "Since the KOSPI's move from 7,000 to 8,000 points was unusually fast, volatility could frequently increase for a while as the market digests this pace."

However, this adjustment in pace is not expected to threaten the existing upward trend. The researcher further noted, "There are events ahead that will help limit the downside for stock prices, such as the U.S.-Iran talks resuming during the week and NVIDIA's earnings announcement on the 21st," and advised, "Investors should refrain from joining in the selling of leading stocks."

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