[Good Morning Market] U.S. Weakens Ahead of July CPI… Korea Expected to "Open Weak, Close Strong"

All Eyes on July U.S. CPI to Be Released on the 12th


Korean Market Expected to Strengthen Later, Buoyed by Philadelphia Semiconductor Index

U.S. stock markets closed lower due to lingering uncertainty over the Strait of Hormuz and investor caution ahead of the July Consumer Price Index (CPI) release. The Korean stock market also appears likely to open weak for the same reasons, but is expected to gain strength later in the session, supported by the relative strength of U.S. Philadelphia semiconductor stocks.

On the 4th, employees were monitoring the stock market and exchange rates in the dealing room at the headquarters of Hana Bank in Jung-gu, Seoul. On that day, the KOSPI opened at 6351.38, up 93.93 points (1.50%) from the previous trading day, showing a firm upward trend, while the KOSDAQ started at 748.19, up 10.84 points (1.47%), expanding its gains. August 4, 2026 Photo by Jo Yongjun

On the 11th (local time), the S&P 500 Index ended trading at 7,728.2, down 0.32% (24.91 points) from the previous session. The tech-heavy Nasdaq Composite Index also dropped 0.60% (159.91 points) to close at 26,445.45, while another major index finished at 53,791.85, down 0.34% (184.13 points).

Investors are closely watching the July U.S. CPI data to be released on the 12th. This is because the inflation figures are seen as a critical factor potentially reinforcing expectations that the U.S. Federal Reserve will keep its benchmark rate unchanged in September. According to Bloomberg forecasts, the July headline and core CPI are projected to rise 3.4% and 2.5% year-on-year, respectively, lower than June’s readings.

This month’s CPI figures for month-over-month changes will also be important. Since last month’s breakdown of talks between the U.S. and Iran triggered fears of military conflict and upward pressure on oil prices, the market needs to gauge the extent to which such developments are fueling inflation. The month-over-month consensus now sits at 0.1% for headline CPI and 0.2% for core CPI, reflecting the market’s higher expectations compared to June.

Ji-Young Han, a research analyst at Kiwoom Securities, commented, “With heightened anxiety over energy-related inflation emerging from the Strait of Hormuz, even if CPI results simply match consensus, it would be advisable for stock markets to pursue a base scenario in which such results are seen as a neutral factor.”

Today, the Korean stock market is expected to show a “weak-then-strong” pattern—beginning with a soft opening due to the weak performance of major U.S. indices, but later rebounding on the relative strength of the Philadelphia Semiconductor Index and perceptions that the overall indexes have been oversold. On the 11th, the Philadelphia Semiconductor Index closed at 12,098.47, up 0.87% (104.61 points) from the previous session. After the market closed, CoreWeave and Super Micro Computer each climbed more than 13% and 7% in after-hours trading, which is also a positive sign for domestic stocks related to the artificial intelligence (AI) value chain.

The KOSPI’s volatility has stabilized compared to June and July. During that period, the average for the KOSPI 200 Volatility Index (VKOSPI), which measures expected future volatility, remained in the 85-point range. However, since this month, it has fallen to 70 points. Yesterday, it recorded the 61-point range—the lowest since May 8, when it dropped to 60 points.

Another analyst said, “Although the recent momentum behind KOSPI’s rebound is not particularly strong, it is important to note that abnormal levels of volatility, which had caused confusion in directional bets for the market, are normalizing ahead of stock prices themselves. As a result, the risk of sharp, intraday fluctuations and concentration in a few sectors is likely to decrease. This will help provide greater continuity for the anticipated recovery in the market by supporting more stable fund flows.”

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