Last week, the domestic stock market experienced a "Black Friday" and is expected to continue high volatility this week. While U.S. stocks showed some resilience despite profit-taking in semiconductor shares, investor sentiment remains shaky ahead of major events, including the potential delay of OpenAI's IPO, geopolitical tensions between the U.S. and Iran, and the upcoming release of South Korea's June export figures and U.S. employment data.
On June 26, the KOSPI plunged 519.09 points (5.81%) to close at 8411.21, with sell-side circuit breakers triggered as investor sentiment sharply deteriorated.
On the New York Stock Exchange, the Dow Jones Industrial Average fell 44.51 points (0.09%) to finish at 51,876.11. The S&P 500 dropped 3.47 points (0.05%) to close at 7354.02, while the tech-heavy Nasdaq Composite fell 60.99 points (0.24%) to end at 25,297.62. The Philadelphia Semiconductor Index recorded a 7.9% decline this week, marking its largest weekly drop since early April.
Despite the weakness in semiconductor stocks, sector rotation helped limit losses in the U.S. market. Speculation about a potential delay in OpenAI's IPO raised concerns about the sustainability of AI infrastructure investments, leading to profit-taking across semiconductor stocks. In contrast, defensive sectors such as healthcare, utilities, real estate, and consumer staples saw increased buying interest. The equal-weighted S&P 500 index reached an all-time high, indicating a reduction in the concentration of large tech stocks.
Market analysts are focusing on the implications of the potential delay of OpenAI's IPO rather than the delay itself. The New York Times reported that OpenAI is considering postponing its IPO to next year in order to achieve a valuation of $1 trillion. This has raised concerns that the timeline for significant funding rounds for AI companies may be pushed back, with firms like JP Morgan suggesting a slowdown in AI infrastructure investment.
On a more positive note, macroeconomic indicators showed some improvement. The University of Michigan's final consumer sentiment index for June came in at 49.5, slightly below market expectations but over 10% better than the previous month’s 44.8. The one-year inflation expectation also decreased to 4.6%, easing some price pressures.
However, tensions in the Middle East remain a variable. The U.S. and Iran exchanged localized airstrikes over the weekend concerning the Strait of Hormuz. Nevertheless, Axios reported that both countries agreed to halt attacks and hold talks in Qatar, alleviating some fears of escalation. International oil prices also fell, with WTI closing down 3.74% at $69.23 per barrel as supply concerns eased.
Analysts suggest that while a technical rebound may occur in the domestic market following last week’s sharp decline, increased volatility is likely. Han Ji-young, a researcher at Kiwoom Securities, stated, "Recent market volatility is not just a simple downturn but a process of repeated supply and demand shifts." She emphasized that this week, South Korea's June export figures, particularly the growth rate of semiconductor exports, will be key variables influencing market direction.
She added, "If the growth rate of semiconductor exports in June remains in the mid to high 100% range, it could significantly alleviate concerns about a peak-out in the memory market. There is also a possibility of technical buying interest following last week’s decline."
Kim Seok-hwan, a researcher at Mirae Asset Securities, noted, "The speculation about OpenAI's IPO delay has directly triggered profit-taking in semiconductor stocks, but there is a rotation among sectors in the market. This week, the developments in the semiconductor sector and the geopolitical risks between the U.S. and Iran will likely dictate the volatility of the domestic stock market."
* This article has been translated by AI.
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