The KOSPI is expected to take a breather on July 24 amid the spread of geopolitical risks in the Middle East and a sharp decline in U.S. big tech stocks. The New York stock market experienced a broad downturn as international oil prices surpassed $100 per barrel and U.S. Treasury yields rose.
U.S. stocks closed lower across the board. With Alphabet and Tesla shares plummeting, investor sentiment weakened, particularly in technology stocks, as both international oil prices and U.S. Treasury yields surged.
On July 23 (local time), the Dow Jones Industrial Average fell by 506.93 points (0.97%) to close at 51,711.65. The S&P 500 index dropped 90.66 points (1.21%) to finish at 7,408.30, while the tech-heavy Nasdaq Composite Index plummeted 553.21 points (2.15%) to end at 25,137.69.
Despite reporting better-than-expected earnings, Alphabet's stock fell nearly 7% as concerns over deteriorating free cash flow due to large AI investments came to the forefront. Tesla also saw a decline of over 14% due to disappointing second-quarter results and worries about cash flow amid expanded investments.
In the domestic market, major semiconductor stocks are showing weakness in pre-market trading. According to NextTrade, as of 8:35 a.m., Samsung Electronics was trading at 268,500 won, down 1,500 won (0.56%) from the previous session. SK Hynix also recorded a drop of 15,000 won (0.78%), trading at 1,904,000 won.
Market analysts predict that while initial weakness is inevitable, a differentiated market based on earnings season will emerge. Han Ji-young, a researcher at Kiwoom Securities, stated, "Although we will start lower due to geopolitical uncertainties surrounding the U.S. and Iran and the sharp decline in the U.S. stock market, there is a possibility of some recovery in semiconductor stocks during the day. While rising oil prices may increase interest rate pressures, the impact on stock prices could be limited considering current market valuations."
* This article has been translated by AI.
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