The U.S. stock market surged following the midterm elections, buoyed by reduced political uncertainty and a sharp drop in international oil prices. However, on November 5, the domestic market is expected to remain volatile, particularly in semiconductor stocks. Concerns over stricter regulations on artificial intelligence (AI) data centers in the U.S. have led to weakness in semiconductor shares, with foreign investment flows seen as a key factor influencing the KOSPI's direction.
On November 4, the Dow Jones Industrial Average closed up 1,569.40 points (3.03%) at 53,356.12. The S&P 500 rose by 119.70 points (1.58%) to finish at 7,688.62, while the Nasdaq Composite gained 364.50 points (1.44%), closing at 25,736.51.
The Democratic Party's control of both the House and Senate, known as a 'blue wave,' has alleviated political uncertainty. Additionally, expectations for an early end to the war in Iran contributed to an over 8% drop in international oil prices, alongside falling U.S. Treasury yields, which improved investor sentiment.
However, within the tech sector, stock performance was mixed. Nvidia fell 3.1% amid concerns over potential regulations on data center construction by the Democrats, and the Philadelphia Semiconductor Index dropped 3.13%. In contrast, major tech companies like Microsoft (up 6.7%), Amazon (up 6.1%), and Alphabet (up 3.2%) saw gains due to eased investment burdens in AI infrastructure.
Indicators closely tied to the domestic market also showed weakness. The MSCI Korea ETF fell 1.90%, and KOSPI night futures dropped 1.66%. Despite the overall rise in U.S. stocks, investor sentiment towards the semiconductor sector remains subdued.
In pre-market trading on NXT, major semiconductor stocks continued to show weakness. As of 8:05 a.m., Samsung Electronics was trading at 212,000 won, down 2.75% from the previous session. SK Hynix also recorded a 4.51% decline at 1,333,000 won. Other stocks like Samsung Electro-Mechanics (-3.77%) and SK Square (-4.12%) also fell. Conversely, LG Energy Solution (up 1.97%), Hyundai Motor (up 5.11%), and Samsung Biologics (up 2.54%) showed gains, indicating sector differentiation.
Analysts believe that the rise in U.S. stocks, along with falling oil prices and Treasury yields, will support the domestic market's downside. Particularly, South Korea's economy, which is heavily reliant on energy imports, may benefit from lower oil prices, reducing corporate cost burdens and inflationary pressures.
Changes in U.S. green energy policies and expectations for expanded healthcare support could also positively impact related domestic sectors. However, concerns remain regarding delays in new investments in the semiconductor sector, which may lead to continued foreign selling.
Seo Sang-young, managing director at Mirae Asset Securities, stated, "While the strong performance of the U.S. stock market and the drop in oil prices and Treasury yields are favorable for the domestic market, the significant declines in U.S. semiconductor companies due to data center regulation issues pose a burden. For the time being, volatility in the index may increase, particularly in the semiconductor sector, but considering improvements in external financial conditions and corporate earnings, the domestic market is expected to show a solid trend."
* This article has been translated by AI.
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