[Good Morning Market] U.S. Stocks Rise Consecutively During Korean Holiday... Korea Watches Interest Rates, Samsung Results

U.S. Markets Rally on Easing Fed Tightening Concerns

South Korea Eyes FOMC on the 7th and Samsung's Earnings on the 8th This Week

During the domestic stock market holiday, the U.S. stock market closed higher, driven by expectations for the earnings season and an easing of concerns over Federal Reserve (Fed) tightening, despite the rise in market interest rates. For the domestic market, the direction of U.S. interest rates and the announcement of Samsung Electronics' preliminary third-quarter results are expected to be the main events this week.

Yonhap News Agency

On October 5 (local time), the Dow Jones Industrial Average on the New York Stock Exchange closed at 51,267.90, up 90.94 points (0.18%) from the previous trading day. The S&P 500 Index rose 51.23 points (0.66%) to close at 7,773.95, while the Nasdaq Index climbed 286.45 points (1.05%) to end at 27,477.31.

On October 2 as well, the Dow Jones Industrial Average (0.49%), the S&P 500 Index (0.73%), and the Nasdaq Index (1.19%) all finished higher compared to the previous trading day.

On October 2, despite continued upward pressure on the U.S. 10-year Treasury yield, the indices rose due to weaker September employment data and news of strategic oil reserve releases from the Group of Seven (G7) nations. On October 5, stock prices continued to increase, reflecting the burden of rising market interest rates but also the impact of Nvidia reaching an all-time high and mounting enthusiasm for the AI sector's third-quarter earnings season.

Particularly noteworthy, the September U.S. employment data released on October 2 weakened the Fed's rationale for further tightening, providing relief to the U.S. stock market. New jobs totaled 29,000, significantly below the market consensus of 90,000. While the unemployment rate came in higher than expected at 4.2% (versus 4.1% consensus), the year-over-year increase in average hourly earnings was 3.0%, lower than the 3.3% the market had anticipated.

This week, the domestic stock market is expected to watch the trajectory of U.S. interest rates closely while adjusting positions. The minutes from the Federal Open Market Committee (FOMC), scheduled for release on October 7, are expected to be a key macroeconomic event. However, the securities industry anticipates its actual impact will be limited. Ji-Young Han, a researcher at Kiwoom Securities, said, "The minutes are mainly backward-looking, as they do not reflect the below-forecast August Personal Consumption Expenditures (PCE) Index confirmed after the September FOMC or the weak September employment data."

The researcher added, "Given that leading officials within the Fed have recently stressed caution about further rate hikes, it is appropriate to assume that the odds of renewed expectations for a rate increase after the September FOMC minutes are low. Instead, factors such as the direction of international crude oil prices following the G7's strategic reserve release, the possibility of renewed U.S.-Iran negotiations, and changes in European government bond yields are likely to exert more influence over long-term U.S. interest rates and the stock market."

The scheduled announcement of preliminary results by Samsung Electronics on October 8 is also a major event to watch. According to Kiwoom Securities, the market consensus for Samsung's third-quarter operating profit is KRW 1.069 trillion, which has been revised downward by about 6.2% since last month. The lowered earnings expectations are attributed to the burden of a stronger won.

The researcher noted, "While the bar for Samsung Electronics' third-quarter results has been lowered, it is also worth paying attention to the newly emerging positive factors such as Micron's strong fourth-quarter fiscal 2026 results and Korea's semiconductor exports surging by over 200% in September. This suggests that upwards revisions may resume for not just third-quarter but also fourth-quarter or even fiscal year 2027 earnings consensus, and the market is likely to focus more on changes in earnings beyond the third quarter."

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