On Jan. 19–23, the KOSPI index topped 5,000 points intraday. The KOSPI index has continued a strong rally since the new year. This week (Jan. 26–30), the Federal Open Market Committee (FOMC) of the Federal Reserve, which will decide the year's first U.S. benchmark interest rate, convenes, and U.S. big tech corporations are set to report earnings.
The Fed will hold its first FOMC of the year on the 29th. In the securities market, the prevailing view is that the benchmark rate will be kept at its current level. Na Jeong-hwan, a researcher at NH Investment & Securities, said, "It is unlikely that there will be an additional rate cut before Chair Jerome Powell's term ends."
With a rate hold expected, investors' attention is focused on what judgment Powell will offer on jobs and inflation. Depending on Powell's remarks, the timing of additional cuts could be gauged. Powell will hold a press conference immediately after the meeting.
Samsung Securities projected that the Fed will cut rates twice this year, in June and September. Heo Jin-uk, a researcher at Samsung Securities, said, "Among FOMC participants, there is a growing consensus that it is necessary to maintain a wait-and-see mode for the time being and have time to confirm in the data whether inflation is easing," and added, "In addition, the rapid easing in the short term of geopolitical risks such as the Venezuela situation and the Greenland issue that flared in January is also a factor reducing the urgency and need for monetary policy action."
There is also strong interest in who the next Fed chair nominee will be. Scott Bessent, the U.S. treasury secretary, said as early as this week he is likely to announce the nominee for the next Fed chair.
Kim Yu-mi, a researcher at Kiwoom Securities, said, "For now, former Fed governor Kevin Warsh is being talked about as a strong contender, but as expectations have recently risen for Rick Rieder, the global fixed income chief investment officer (CIO), uncertainty remains." Meanwhile, on the 30th, last month's U.S. producer price index (PPI) is also scheduled to be released.
On the 28th–29th, earnings reports from U.S. big tech corporations favored by Korean retail investors trading U.S. stocks are lined up. Five of the M7 companies are set to report. Microsoft, Meta and Tesla report on the 28th, and Apple and Amazon on the 29th.
Big tech earnings are expected to be generally solid. Yoo Myung-gan, a researcher at Mirae Asset Securities, said, "Earnings per share (EPS) estimates for 2026 for top market-cap tech corporations have been revised upward, centered on semiconductor corporations," and added, "EPS for the IT sector also rose 0.6%."
In particular, this round of big tech earnings could have a significant impact on industries related to artificial intelligence (AI). Depending on the monetization outlook of global AI corporations, expectations for infrastructure investment beneficiaries across the semiconductor industry could change.
Researcher Na Jeong-hwan analyzed, "Depending on Microsoft's and Amazon's cloud institutional sector revenue and guidance, expectations for AI compute demand could fluctuate," adding, "There is a possibility it will act as a variable for semiconductor and power industries, which are AI infrastructure-related industries."
On the 29th in Korea, Samsung Electronics and SK hynix, which lead the KOSPI market, will announce their fourth-quarter results from last year at the same time. The market's uptrend is also likely to be swayed by the earnings and outlook of large-cap semiconductor stocks.
There are projections that the domestic stock market's uptrend could continue this week as well. Researcher Yoo Myung-gan said, "With improving earnings and a stock market-friendly policy stance providing support, the index's uptrend is likely to continue," explaining that from the perspective of earnings growth rate, semiconductors, industrials and large caps are favorable through the first half.
In the short term, KOSDAQ, which is more attractively priced than KOSPI, and financials and holding companies aimed at the dividends season in February–March were added as advantageous choices.