In the second week of the new year (5th–9th), investors are focusing on major semiconductor events such as CES 2026, the world's largest IT and home appliance exhibition. If the scalability of artificial intelligence (AI) is reaffirmed at this event, the tilt of funds toward tech stocks such as semiconductors and electrical and electronics is expected to accelerate. On the other hand, if innovation falls short of expectations or concerns about the earnings of major corporations come to the fore, the early-year stock rally could stall.
Key December economic indicators that will gauge the U.S. rate-cut path are lined up. Leading indicators such as the ISM manufacturing and services indexes and the December nonfarm payrolls will be released, providing a check on the economic trend and market sentiment.
Last week (Dec. 29–Jan. 2), the KOSPI closed at a record high of 4,309.63, buoyed by AI momentum and expectations for an improved semiconductor cycle. The index, which started at 4,146.48 on the 29th, rode a strong "Santa rally" to break above 4,300 on the first trading day of the new year on the 2nd. In particular, net buying by both individuals and foreigners pulled the index higher, demonstrating the market's underlying strength.
The KOSDAQ market also showed a solid trend. Starting at 923.22 on the 29th, the KOSDAQ index maintained gains of around 1% for the week and broke above 945 on the 2nd. In the KOSDAQ market, individuals, foreigners and institutions actively rotated, swapping buying interest by sector.
The biggest theme in the market this week is clearly the "real growth potential of AI." At CES 2026, to be held in Las Vegas from the 6th to the 9th, the evolution of AI technology and its industrial scalability will take center stage. In particular, the keynote speeches scheduled for the evening of the 5th (local time) by Jensen Huang, Nvidia CEO, and Lisa Su, AMD CEO, are expected to be a major watershed that will determine the trajectory of semiconductor and AI-related stocks.
Na Jeong-hwan, an NH Investment & Securities analyst, said, "The main point to watch at this CES is physical AI," adding, "The unveiling of robot and humanoid technologies by domestic corporations could broaden interest among overseas investors." In particular, Hyundai Motor plans to demonstrate the humanoid "Atlas" from its subsidiary Boston Dynamics for the first time.
Earnings visibility also needs to be confirmed through semiconductor corporations' results. On the 8th, Samsung Electronics will announce preliminary fourth-quarter results, and on the 9th, TSMC will release December sales. The market expects Samsung Electronics' fourth-quarter operating profit to be 16 trillion won. The semiconductor super cycle is continuing, helped by improved memory supply-demand and rising demand for high-bandwidth memory (HBM).
The key environmental variable for extending the semiconductor-centered stock rally is the U.S. interest-rate stance. This week, leading indicators and employment data will be released in succession, providing a check on the rate-cut trajectory.
First, the December ISM manufacturing index, to be released on the 5th, is expected at 48.4, a slight improvement from the prior month (48.2), but it will remain below the baseline 50 for a ninth straight month, indicating continued contraction in manufacturing. The ISM services index will be released on the 7th.
On the 9th, the December nonfarm payrolls will be released. The market expects job growth to continue, but with limited gains. According to Bloomberg, nonfarm payrolls are projected at 55,000, an improvement from the prior month (-32,000). The unemployment rate is expected to edge down to 4.5% from 4.6% in November, helped by the resolution of the shutdown and a rise in the labor force participation rate.
Jeong Hae-chang, a Daishin Securities Co. analyst, said, "At the December Federal Open Market Committee (FOMC), rates were cut on concerns about slowing employment and growth despite inflationary pressures, so this jobs report needs to confirm elements that can justify the rate-cut cycle."
Advice this week is to focus on semiconductor and biotech names. The semiconductor leadership is likely to persist through the first half of this year, and foreign inflows are improving as the upside in the exchange rate is limited.
Kim Jong-min, a Samsung Securities analyst, said, "As global liquidity and investor attention are concentrated on AI, investors should increase exposure to the broad AI sector to capture upside momentum," adding, "If volatility increases here, supplementing with biotech names could provide an opportunity for outperformance."
The potential for a re-rating of value stocks is also being raised. Lee Kyung-su, a Hana Securities analyst, said, "A rise in the U.S. 10-year Government Bonds yield increases the discount rate for growth stocks and adds to valuation burdens, but it enhances the relative appeal of value stocks." He added, "Historically, January shows clear seasonality for undervaluation factors. Over the past 20 years, the probability of excess returns for the value factor in the Korean market has been higher than for other factors."