Comments made at last week's Jackson Hole meeting have raised expectations for a U.S. interest rate cut, creating a favorable atmosphere in the domestic stock market. The remarks by Jerome Powell, Chair of the U.S. Federal Reserve, stating that he could "adjust the policy stance" appear to have spurred investor sentiment.
As of 9:02 a.m. that day, the KOSPI index showed an increase of 26.39 points (0.83%) to 3,195.12 compared to the previous transaction day. Individuals have net bought 97.9 billion won alone, while institutions and foreigners have net sold 28.3 billion won and 72.3 billion won, respectively.
The top 10 stocks by market capitalization in the Korean securities market are generally showing strength. SK hynix, LG Energy Solution, Samsung Biologics, Hanwha Aerospace, HD Hyundai Heavy Industries, and KB Financial are showing strong performance, while Samsung Electronics and Samsung Electronics preferred shares are in decline. Hyundai Motor and Kia are steady.
The KOSDAQ index also indicated an increase of 11.94 points (1.53%) to 794.45 compared to the previous transaction day. By investor type, individuals and foreigners net purchased 6.2 billion won and 7.5 billion won, respectively, while institutions net sold 6.5 billion won.
The top 10 stocks by market capitalization are also performing strongly. Rainbow Robotics is showing a strong increase of over 6%, while Alteogen, ECOPRO BM, Ecopro, LigaChem Biosciences, HLB, ABL Bio, and Sam Chun Dang Pharm are also rising together. Peptron and PharmaResearch are experiencing slight declines of around 1%.
The New York Stock Exchange saw the three major indices close sharply higher on the previous transaction day, on the 22nd, following remarks by Powell. The Dow Jones Industrial Average surged 856.24 points (1.8%) to close at 40,631.74, breaking its all-time high. The Standard & Poor's (S&P) 500 index rose 96.74 points (1.52%) to 6,466.91, while the Nasdaq Composite index increased by 396.22 points (1.88%) to finish at 21,496.54. The S&P 500 and Nasdaq both set new all-time closing highs.
Amid dwindling expectations for an interest rate cut from the Federal Reserve, Powell's comments made at the Jackson Hole meeting have stimulated investor sentiment. In his keynote speech at the Jackson Hole meeting, Powell noted, "Inflation is much closer to our target, and the labor market has cooled," adding, "We need to adjust the policy stance."
However, according to the Chicago Mercantile Exchange (CME) FedWatch, the probability of a rate cut spiked to 91.5% right after Powell's remarks, up from 73.3%, but has slightly decreased to 87.3%. This is due to a cautious analysis suggesting that Powell did not promise a rate cut in September, but indicated the possibility of a rate cut on the assumption that real economic indicators maintain the current state.
Han Ji-young, a researcher at Kiwoom Securities, said, "The outlook for a rate cut could change drastically depending on the August non-farm payroll and consumer price index (CPI) announcements before the September Federal Open Market Committee (FOMC)." He added, "It is still difficult to fully gauge how much impact the mutual tariffs from August will have."