[Good Morning Markets] Cautious KOSPI Expected Ahead of Warsh's Jackson Hole Speech

Kevin Warsh's Fed Chair Speech Set for the Night of the 28th (Local Time)

"KOSPI Has Potential to Reach 7,000 from a Valuation Perspective"

Amid anticipation ahead of the Jackson Hole speech by Kevin Warsh, Chair of the U.S. Federal Reserve (Fed), it is expected that the domestic stock market will remain range-bound due to a wait-and-see sentiment.

On the 27th, the KOSPI index opened at 6,996.12, up 187.91 points from the previous trading day. The status of the domestic stock market is displayed on the electronic board in the dealing room of the Hana Bank headquarters in Jung-gu, Seoul. August 27, 2026. Photo by Kang Jinhyung

On the 27th (local time), the Dow Jones Industrial Average closed at 53,569.44, up 105.56 points (0.20%) from the previous session. The S&P 500 index rose by 55.29 points (0.72%) to 7,730.99, while the tech-heavy Nasdaq Composite gained 411.15 points (1.57%) to finish at 26,541.35.

The market was strong, led mainly by the Nasdaq, driven by artificial intelligence (AI) momentum resulting from earnings surprises from Nvidia (8.7%) and Salesforce (22.6%). In particular, Nvidia heightened market expectations for AI demand by projecting a sales growth rate of 70% for fiscal 2028, surpassing the market consensus of 44%.

The key focus in the near term is Chair Warsh's upcoming Jackson Hole speech on the 28th. It will be important to see whether signals of a rate hike for next month emerge, and whether there are remarks that could influence the direction of long-term market interest rates.

Chair Warsh is likely to adopt a cautious stance on further tightening. This is because the U.S. Treasury has implemented market stabilization measures such as expanding buybacks, and the year-on-year growth rate of the U.S. Consumer Price Index (CPI) last month fell to 3.4%, down from 3.5% the previous month, which has somewhat alleviated upside uncertainties regarding inflation. Given these circumstances, it is reasonable to base the outlook on a scenario where risk appetite remains intact across the equity market after Warsh's speech.

Today, despite the strength in U.S. markets driven by Nvidia and Salesforce, the domestic stock market is expected to see a wait-and-see approach as investors anticipate Chair Warsh's remarks. As a result, sector rotation and differentiation are expected to emerge.

Going forward, from the perspective of the KOSPI's direction, attention should be paid to whether the index will surpass the 7,000-point mark. This is because such a change in the leading digit can generate psychological momentum and the effect of overcoming resistance.

In terms of valuation, there is significant upside potential. As of the previous day, the consensus for this year's and next year's KOSPI operating profit was KRW 989.7 trillion and KRW 1,314.3 trillion, respectively, both revised upward from the end of last month (KRW 974.9 trillion for this year and KRW 1,310.9 trillion for next year).

Jiyoung Han, a researcher at Kiwoom Securities, said, "Current valuations provide an incentive to invest, volatility is decreasing, and other fundamental conditions are improving. Even if the KOSPI does not surpass 7,000 today, it is important to focus on the possibility that the index could reach the 7,000-point milestone next month, thereby extending the medium-term recovery trend."

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