U.S. Tech Stocks Rally, Boosting Hopes for Domestic Semiconductor Recovery

On June 29, the KOSPI closed at 8,394.65, down 16.56 points (0.20%), while the KOSDAQ rose 69.20 points (8.13%) to finish at 920.57. [Photo=Yonhap News]

U.S. stock markets experienced a rebound led by technology shares, suggesting a positive start for the domestic market. However, as June marks the end of the first half of the year, increased volatility due to rebalancing activities is expected, making the performance of semiconductor stocks and sector rotation key factors for the day.
On June 29, the Dow Jones Industrial Average rose by 306.63 points (0.59%) to close at 52,182.74. The S&P 500 gained 86.41 points (1.18%) to finish at 7,440.43, while the tech-heavy Nasdaq surged by 522.52 points (2.07%) to end at 25,820.14.
Despite a slow start due to weakness in semiconductor stocks, the U.S. market shifted as semiconductor shares rebounded and buying interest spread to major tech companies. Tesla saw a significant increase of 8.46%, while Alphabet rose by 4.96%, NVIDIA by 1.27%, and Amazon by 3.20%. Semiconductor equipment manufacturer Applied Materials also surged by 10.82%, boosting investor sentiment.
A contributing factor to the improved market sentiment was the agreement between the U.S. and Iran to halt mutual attacks and resume practical negotiations, easing some geopolitical risks. However, international oil prices reflected the impact of weekend conflicts, with West Texas Intermediate (WTI) crude rising by 2.20% to $70.75 per barrel, indicating ongoing energy price pressures.
In pre-market trading (8:00 AM to 8:50 AM), Samsung Electronics showed a gain of over 1%, trading in the 320,000 won range, while SK Hynix remained stable around 2,630,000 won.
Analysts suggest that the domestic market is likely to open higher, reflecting the rebound in U.S. semiconductor stocks and strength in tech shares. Additionally, the stability of the U.S. 10-year Treasury yield at around 4.376% is seen as a positive factor for growth stock investment sentiment.
Han Ji-young, a researcher at Kiwoom Securities, noted, "The Philadelphia Semiconductor Index's recovery after a drop of over 3% is significant for investor sentiment. The domestic market is likely to open higher, supported by the rebound in semiconductor stocks."
However, as the day progresses, changes in supply and demand due to end-of-quarter rebalancing will be a variable to watch. If institutional investors and pension funds focus their trading on semiconductors during portfolio adjustments, it could lead to increased volatility in the index.
The sector rotation observed in the domestic market the previous day will also be a point of interest. Despite a more than 3% decline in the semiconductor sector, most sectors, including chemicals, IT electronics, and construction, showed strength, limiting the overall index decline. Foreign investment flows continue to diversify away from semiconductors, suggesting potential rotation into sectors such as steel, chemicals, transportation, securities, power equipment, and biotech.
The sustainability of the KOSDAQ's rebound is also under scrutiny. The KOSDAQ surged over 8% the previous day, driven by perceptions of excessive declines and expectations for policy support. With the 30th anniversary event of the KOSDAQ scheduled for this week, there is anticipation for potential market activation measures to be announced.

* This article has been translated by AI.