Following a strong rebound in the domestic stock market centered on KOSDAQ, investor sentiment is expected to be constrained by a pause in U.S. stocks and a surge in international oil prices. However, the recent slowdown in U.S. job growth has eased concerns over interest rate hikes by the Federal Reserve, and the upward trend in small-cap and non-semiconductor sectors in the domestic market suggests a potential continuation of overall index recovery.
On August 10, the KOSPI closed at 6,299.66, up 40.89 points (0.65%) from the previous trading day. The KOSDAQ surged 55.66 points (6.97%) to finish at 854.47. Notably, the KOSDAQ has shown a significant rebound, outperforming the KOSPI due to perceptions of excessive declines and improved supply and demand.
On the same day, U.S. stocks closed slightly lower amid concerns over recent record highs and uncertainties surrounding the reopening of the Strait of Hormuz. The Dow Jones Industrial Average fell 0.11% to 53,975.98, while the S&P 500 dipped 0.06% to 7,753.11, and the Nasdaq Composite dropped 0.32% to 26,605.36.
A key factor pressuring U.S. stocks is the rise in international oil prices. Negotiations between the U.S. and Iran have stalled, diminishing expectations for the reopening of the Strait of Hormuz, leading to a more than 5% increase in oil prices, with WTI surpassing $80 per barrel. Additionally, the yield on 10-year U.S. Treasury bonds has risen above 4.70%, increasing the discount rate burden on growth stocks.
Semiconductor stocks remain a variable. Major semiconductor companies in the U.S. saw declines overnight, with Nvidia down 2.86%, Micron down 1.89%, and AMD down 2.85%. The Philadelphia Semiconductor Index fell 2.94%. Intel's announcement of a $15 billion capital increase has raised concerns about funding for AI investments and potential dilution of shareholder value.
Reports indicate that Nvidia is working with large asset management firms and financial institutions to establish a substantial funding structure for AI infrastructure. As AI investment expands beyond semiconductors to include data centers and power grids, the need for significant capital could impact related domestic stocks.
However, it remains to be seen whether semiconductor stocks will follow the U.S. market's downward trend. In the domestic market, the recent concentration in semiconductors has eased, with supply and demand diversifying into sectors such as power equipment, MLCC, defense, and biotechnology. If semiconductors face a correction, buying interest in other sectors could support the index.
Today, the focus in the domestic market will be on profit-taking from the recently surging KOSDAQ and small-cap stocks. The KOSDAQ has risen approximately 32.5% since its low on July 30, while the KOSPI's increase during the same period was about 12.6%. Given the significant short-term gains, there is a possibility of profit-taking in certain stocks today.
However, some analysts argue that the KOSDAQ's strength should not be viewed merely as a short-term theme. The KOSDAQ experienced a maximum decline of about 47% compared to its peak during the July crash, which was greater than the KOSPI's drop. This recent rebound is attributed to a correction from excessive declines and supply and demand dynamics aimed at narrowing the performance gap with the KOSPI.
Among external factors, oil prices and interest rate trends are considered the most critical. With the U.S. and Iran at an impasse over the reopening of the Strait of Hormuz, oil price volatility may increase in the near term. If rising oil prices rekindle concerns about inflation in the U.S., it could counteract the recent easing of expectations for interest rate cuts by the Federal Reserve due to slowing job growth.
This week, the upcoming release of the U.S. Consumer Price Index (CPI) for July is also a variable. As market attention shifts back to inflation following the slowdown in job growth, a CPI reading higher than expected could trigger both interest rate increases and profit-taking in risk assets. Conversely, if the CPI aligns with market expectations or confirms a slowing trend, it could alleviate the recent interest rate burden and support the recovery of the domestic market.
Han Ji-young, a researcher at Kiwoom Securities, stated, "Compared to the market's entanglement during the semiconductor concentration in June and July, the warmth of the market is spreading across sectors, which is positive. With potential upward catalysts for the KOSPI, such as U.S. tech stock performance and expectations for shareholder returns from domestic semiconductor stocks, the overall recovery momentum in the domestic market remains valid."
* This article has been translated by AI.
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