**Uncertainty in US Interest Rates and Weakness in AI Stocks**
**Nvidia Ahead of Earnings Down 1.88%**
On the 17th, the KOSPI index and exchange rates were displayed in the dealing room of Shinhan Bank in Jung-gu, Seoul. [Provided by Shinhan Bank]
[Herald Economy = Reporter Jeong Yoon-hee] As caution spread in the US stock market ahead of Nvidia’s earnings release and the possibility of a rate pause emerged, it is anticipated that the KOSPI will also start lower on the 18th.
The previous day, the KOSPI closed at 4,089.25, up 77.68 points (1.94%) from the previous session, driven by foreign investors’ buying.
The influence came from a reduced speculation of an ‘AI bubble’ and the highlighted trend of rising memory prices, which led to bargain hunting in AI-related and large tech stocks. Additionally, the news that Warren Buffett’s Berkshire Hathaway had purchased a large amount of Alphabet shares seems to have thawed the previously frozen investor sentiment.
Foreign investors were the driving force behind the index rise. They made net purchases of 518.2 billion won in the stock market and showed a buy surplus of 75.5 billion won in the KOSPI 200 futures market.
Overnight, the three major US stock indexes fell simultaneously due to the statements by the Federal Reserve Vice Chair and concerns over Nvidia’s earnings.
The Dow Jones Industrial Average closed at 46,590.24, down 557.24 points (1.18%) from the previous session. The S&P 500 index fell by 61.70 points (0.92%) to 6,672.41, and the Nasdaq Composite Index declined by 192.51 points (0.84%) to finalize at 22,708.08.
The Dow Jones and S&P 500 indexes both fell for the third consecutive trading session. This is interpreted as the impact of Federal Reserve Vice Chair Philip Jefferson’s remarks suggesting a need to “proceed slowly” with monetary policy, which weakened expectations for an imminent rate cut.
Additionally, reports that billionaire investor Peter Thiel’s hedge fund, Thiel Macro, sold all of its Nvidia shares worth $94 million (approximately 137.5 billion won) in the last quarter created negative sentiment for Nvidia’s stock ahead of its earnings report. Nvidia’s stock fell by 1.88%.
Mirae Asset Securities researcher Kim Seok-hwan stated, “The US stock market closed lower due to the broad weakness in major tech stocks and increased market uncertainty.”
In turn, the MSCI Korea Market ETF and the MSCI Emerging Market ETF both declined by 1.18%.
Consequently, it is forecasted that KOSPI will start lower today. As the third quarter earnings season for domestic listed companies has ended, it’s predicted that the direction of the stock market will temporarily be influenced by US factors, such as the words of Federal Reserve officials, US employment data, or Nvidia’s earnings.
Kiwoom Securities researchers Han Ji-young and Lee Seong-hoon stated, “KOSPI is expected to start lower due to the simultaneous weak performance of US AI and semiconductor stocks like Nvidia and the ongoing uncertainty regarding a rate cut in December.”
Nevertheless, “while the index level may show a pattern of retracing previous gains, there will be a differentiated market trend based on individual industry issues and the extent of previous price declines,” they predicted.