[Good Morning Market] U.S. Stocks Rebound Led by Tech; What Does It Mean for KOSPI?

Rebound Led by U.S. Tech Stocks Raises Hopes for Korean Market
"Possibility of Volatility from Rebalancing on the Last Day of June"

Major U.S. stock indexes rebounded across the board, led by technology stocks, raising expectations for a positive trend in the Korean stock market on June 30. The burden of expanding investment costs in artificial intelligence (AI) has somewhat eased, and news of renewed peace talks between the United States and Iran appears to have served as a favorable factor for the U.S. stock market.

On June 29 (local time), the S&P 500 Index closed at 7,440.43, up 1.18% from the previous session in the New York Stock Exchange. The tech-heavy Nasdaq Index finished at 25,820.14, up 2.07%. The Dow Jones Industrial Average also rose 0.59% over the same period, closing at 52,182.74 and surpassing the 52,000 mark for the first time ever.

Both the Nasdaq and S&P 500 indices broke their five-day losing streaks. The upward trend was led by large technology and semiconductor stocks. Gains were seen across the board in Micron Technology (1.14%), Nvidia (1.27%), Broadcom (2.04%), Intel (2.65%), AMD (3.43%), Tesla (8.46%), and SpaceX (7.5%). The market sees this rebound as a pause in the correction triggered by concerns over increased costs due to AI investment.

Alphabet, the parent company of Google and a new addition to the Dow, also climbed 4.82%. Reports that Google had restricted Meta’s use of its Gemini AI model were interpreted as a sign of strong AI demand, drawing investor attention.

The news over the weekend regarding the end of U.S. military attacks on Iran and the restart of negotiations also appeared to be a positive factor. U.S. President Donald Trump announced on his social network service, Truth Social, on the same day that "Iran has requested talks," adding that "peace negotiations with Iran will resume in Doha, Qatar, on June 30."

There are also projections that Micron’s recently surging stock price could rise further. Adam Parker, founder of Trivariate Research, believes the AI semiconductor cycle is fundamentally transforming the memory industry. He commented, "This cycle is qualitatively different from previous memory market conditions due to AI demand and massive capital expenditures by hyperscalers. Not holding Micron now is similar to having ignored Nvidia two and a half years ago."

U.S. Treasury yields showed little volatility. The 10-year Treasury yield traded at 4.38%, up 0.9 basis points (1bp=0.01 percentage point) from the previous day. The 2-year yield, which is sensitive to monetary policy, rose 2.1 basis points to 4.11%.

The Korean stock market is also expected to open higher as a result. The MSCI Korea ETF, which closely tracks the local market, rose 0.11%. The Philadelphia Semiconductor Index initially fell 3.19% at the start of trading but ultimately closed up 3.83%. Analysts suggest that the Korean market could show early gains, buoyed by the intraday rebound of U.S. semiconductor stocks and easing concerns over the U.S. 10-year Treasury yield.

Ji Young Han, a researcher at Kiwoom Securities, stated, "There are no significant warning signals in the fundamentals of semiconductor stocks, with memory prices continuing to rise due to strong AI demand and the effects of long-term supply contracts." Han added, "While the Korean stock market is likely to start higher, volatility in semiconductor stock flows caused by quarterly and half-year-end rebalancing could cap the market in the latter part of the session, as June 30 marks the final trading day of the month."

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