[Good Morning Stock Market] "Already cheap, with U.S. AI stocks rallying too"... South Korean stocks seen rebounding

South Korean stocks are expected to rebound, supported by bargain hunting after their recent sharp decline and strength in major U.S. artificial intelligence (AI) stocks.

Stock market indices are displayed in the dealing room at Hana Bank's headquarters in Jung-gu, Seoul, on Nov. 3, as the KOSPI opened lower. The index opened at 5,715.19, down 2.46%, and fell more than 3% in early trading, slipping below the 5,700 mark. 2026.11.3 Photo by Kim Hyunmin

On Nov. 3 (local time), the U.S. S&P 500 closed at 7,568.92, up 27.52 points, or 0.36%, from the previous session. The tech-heavy Nasdaq Composite rose 207.65 points, or 0.83%, to 25,372.01, while the Dow Jones Industrial Average fell 197.26 points, or 0.38%, to 51,786.72.

The gains came despite concerns about slowing end-consumer demand following Apple’s earnings report, with investors awaiting the U.S. midterm election. Bargain hunting focused on AI stocks, including Micron (+2.6%), NVIDIA (+2.3%) and Microsoft (+2.7%).

Markets are expected to focus on the midterm election results, which will become clear today. Republicans currently hold a majority in Congress, but expectations are growing that Democrats could win majorities in both the House and Senate in this election, in what is known as a “blue wave.”

Expectations are building that a historical pattern will hold true again: the S&P 500 has risen in the year following every midterm election since 1950. Regardless of the outcome, the end of the midterm election could help ease political uncertainty. In the event of a blue wave, curbs on government spending could also ease upward pressure on long-term interest rates, potentially benefiting stocks.

However, investors should also consider the possibility that expectations of a blue wave have already been priced into the market. Even if stocks rebound in the short term after the election, the rally’s staying power will depend on whether concerns about the AI industry and geopolitical risks ease.

South Korean stocks are expected to rebound today, despite pressure from rising U.S. interest rates amid anticipation of the U.S. midterm election and issues surrounding U.S.-Iran negotiations. Strength in major U.S. AI stocks and increased incentives to bargain-hunt after sharp declines in domestic stocks are expected to support the market.

Strong earnings from AMD and Super Micro, released after the U.S. market closed, are also expected to have a positive impact on South Korean stocks. AMD reported revenue of $13.38 billion for the third quarter of this year, exceeding expectations of $13.09 billion and marking its highest quarterly revenue on record. Adjusted earnings per share (EPS) also came in at $2.09, above the forecast of $1.95. The stock is up more than 7% in after-hours trading. Super Micro is up more than 8% in after-hours trading after reporting revenue of $19.95 billion and EPS of $1.81 for the first quarter of fiscal 2027 (July-September), both above expectations.

“These strong results should help improve investor sentiment toward South Korean AI-related stocks by easing concerns that the AI investment cycle has peaked and that profitability is weakening,” said Han Ji-young, a researcher at Kiwoom Securities.

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