[Good Morning Stock Market] KOSPI Expected to Remain Volatile... Sector Divergence Likely Based on Earnings

There is an outlook that the domestic stock market will experience volatility due to a combination of both upward and downward factors in the U.S. stock market.

The KOSPI, which showed mixed trends with fluctuations in the early session, turned to an upward trend, as employees monitor the stock market and exchange rates at the Hana Bank headquarters dealing room in Jung-gu, Seoul on the 21st. July 21, 2026. Photo by Cho Yongjun

The U.S. stock market showed a slight decline. On July 22 (local time), the Dow Jones Industrial Average on the New York Stock Exchange ended at 52,218.58, down 6.06 points (0.01%) from the previous session. During the same period, the S&P 500 Index fell by 10.24 points (0.14%) to close at 7,498.96, while the technology-heavy Nasdaq Composite Index dropped 146.30 points (0.57%) to close at 25,690.90.

Despite strong stock performance among semiconductor companies, such as NVIDIA (up 2.3%) driven by expectations for mass production of Vera Rubin, the market was affected by U.S.-Iran tensions as well as investor caution regarding upcoming earnings results of big tech companies—including Alphabet (down 1.2%) and Tesla (down 1.3%). The market showed heightened sensitivity to the earnings results of U.S. artificial intelligence (AI) and big tech companies, starting from this day.

After the market closed, Alphabet announced its earnings for the second quarter of this year, reporting sales of 119.8 billion dollars, surpassing the consensus estimate of 117 billion dollars. Its main business, cloud sales, also came in at 24.7 billion dollars, exceeding the consensus estimate of 22.4 billion dollars. The company's capital expenditure (CAPEX) guidance for this year was revised upward from 185 billion dollars to 200 billion dollars.

While Alphabet's after-hours share price declined due to concerns over profitability from increased capital expenditures, it is important to note that the expansion in capital spending is intended to respond to rising demand. Alphabet's solid earnings and upward revision of CAPEX guidance are helping to alleviate concerns about a potential peaking of the memory cycle.

On this day, the domestic stock market is expected to remain volatile due to the coexistence of both upward and downward factors—including Alphabet's after-hours price weakness and the after-hours strength of U.S. semiconductor stocks such as Micron following the upward CAPEX guidance. During the session, a differentiated sector performance could emerge depending on individual earnings results of Hyundai Motor Company, NH Investment & Securities, and KB Financial Group.

The recent shift of foreign investors to net buying since this week is seen as a positive factor. Foreign investors recorded a net purchase of 2.6 trillion won in the KOSPI in the previous session—the largest daily net buying amount since May 6. Under these circumstances, if the earnings announcements of leading AI and semiconductor stocks, both domestically and globally, continue to come out as scheduled through next week, and expectations for a ceasefire between the U.S. and Iran are rekindled, stock prices are likely to rise.

Han Ji-young, a researcher at Kiwoom Securities, said, "Even if intraday volatility continues to cause psychological confusion among market participants regarding the prospects for index recovery, at this point, it is more appropriate to prioritize increasing stock allocation rather than reducing it."

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