[Good Morning Stock Market] "KOSPI Expected to Recover Steep Losses... Watch Foreign Investor Flows in 'Samsung Electronics-SK hynix'"

U.S. semiconductor stocks rise in after-hours trading
Oil and interest-rate pressures ease
Foreign investors turn net buyers of 'Samsung Electronics'

Domestic stocks are expected to edge higher. Analysts say they will recover some of their steep losses, supported by easing oil-price and interest-rate pressures, gains in U.S. semiconductor shares in after-hours trading following an earnings surprise from an AI server maker, and technical buying.

The KOSPI opened more than 1% higher on Oct. 16, rebounding from a sharp decline that had continued through the previous day. A display showing the performance of the domestic stock market is seen in Hana Bank's dealing room in Jung-gu, Seoul. 2026.10.16. Photo by Kang Jinhyung

U.S. stocks closed mixed on Oct. 20 local time. The Dow Jones Industrial Average rose 529.85 points, or 1.02%, from the previous trading session to close at 52,495.88, while the S&P 500 gained 21.84 points, or 0.28%, to 7,712.57. The tech-heavy Nasdaq Composite fell 6.07 points, or 0.02%, from the previous session to finish at 26,424.82.

There were concerns over the sharp declines in Asian semiconductor stocks, including Samsung Electronics and SK hynix, as well as investor caution ahead of Meta's earnings. However, amid hopes for U.S.-Iran talks following Pakistan's mediation, the yield on the 10-year U.S. Treasury note closed at 5.125%, down from 5.136% the previous day. International oil prices also fell, with Brent crude futures, which had topped $110 a barrel during the session, ending the day in the $109 range.

As a growing number of investors see the recent sell-off in AI stocks as excessive, attention should be paid to the preliminary first-quarter revenue of AI server maker Super Micro, announced after the market close. It came in at $19 billion, surpassing the consensus estimate of $15 billion and delivering a surprise. Super Micro shares consequently surged more than 13% in after-hours trading, while semiconductor stocks such as Micron and Sandisk also gained more than 2%.

Investors will turn their attention to Meta's earnings, scheduled to be announced early Thursday morning. The pace of next year's capital expenditure (CAPEX) growth and the path to cash-flow recovery are expected to be key points of interest. The stock may also be affected by whether the initial profitability of AI Muse, introduced in September, and growth in the company's core advertising business are borne out.

On Oct. 21, domestic stocks are expected to recoup the previous day's steep losses, supported by technical buying, easing oil-price and interest-rate pressures, and gains in U.S. semiconductor shares in after-hours trading following Super Micro's earnings surprise.

A display board shows the domestic stock market at the Hana Bank dealing room in Jung-gu, Seoul, on Oct. 16, 2026, as the KOSPI opened more than 1% higher, rebounding from a sharp decline that continued through the previous day. Photo by Kang Jinhyeong.

The decline in trading value is a factor that could heighten intraday share-price volatility. KOSPI trading value has fallen from an average of around KRW 23 trillion a day last week to around KRW 17 trillion so far this week. In this environment, even a small amount of net selling by foreign investors could amplify share-price volatility.

Doubts surrounding AI infrastructure stocks are also weighing on the market. Elice, an AI cloud company that listed on KOSDAQ the previous day, plunged 32% below its IPO price on its first day of trading. The controversy over returns on AI infrastructure investments stemming from CoreWeave has heightened concerns about newly listed AI stocks.

Going forward, however, attention should be paid to shifts in foreign investors' trading flows in the semiconductor sector. Foreign investors, who had been net sellers of Samsung Electronics for 12 consecutive trading sessions from Sept. 28 through Oct. 15, switched to net buyers for three consecutive sessions starting Oct. 16.

Han Ji-young, a researcher at Kiwoom Securities, said, "Even amid the volatility expected ahead, if supply and demand for semiconductors, the market's leading sector, continue to improve, it would be appropriate to factor into investment strategies the possibility that the KOSPI's downside support could recover, led by these sectors."

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