The Federal Open Market Committee (FOMC) of the U.S. Federal Reserve will meet this week (Mar. 16-20). With international oil prices surging after U.S.-Israeli airstrikes on Iran and inflation fears mounting, markets are focused on what message Federal Reserve Chair Jerome Powell will deliver.
As the war enters its third week, the shock to financial markets appears to be easing somewhat, but investors are still closely watching the situation in the Middle East. The concern is that the surge in oil prices, rather than the war itself, could have a significant impact on inflation and the real economy. This week, too, volatility is expected to continue in the domestic stock market, swinging with the trend in international oil prices.
On the 9th-13th, the domestic stock market swung sharply on the fallout from the Iran crisis. The KOSPI index plunged nearly 6% on the 9th, then rebounded more than 5% the very next day as hopes for an end to the war grew, riding a "roller coaster." The index also rose on the 11th, but as concerns resurfaced that the Iran situation would not calm down in the short term, the KOSPI index fell back below 5,500 points on the 13th.
Kim Yu-mi, an economist at Kiwoom Securities, said, "This week, financial markets will focus on the course of the Iran war and the U.S. March FOMC."
Experts expect the Fed to hold the benchmark interest rate at the current level (3.50%-3.75% per year). Despite the surge in oil prices, the transmission to inflation and the economy remains unclear, and with the Fed's "leadership transition" scheduled with the inauguration of new Chair Kevin Warsh in May, it will be difficult for Powell to present a clear stance.
Even so, investors' attention is expected to center on how the Fed assesses the recent rise in international oil prices.
Economist Kim Yu-mi explained, "What matters is whether the Fed views inflation from rising international oil prices as a temporary expense increase, or as persistent upward pressure on prices," adding, "If the Fed emphasizes inflation and risks, market volatility could widen further, but if it judges the factors to be temporary due to a supply shock, it could provide relief to financial markets."
Also on the 16th-19th this week, Nvidia's annual technology conference "GTC 2026" will be held. At the conference, Nvidia is expected to announce detailed specifications and a release schedule for the next-generation GPU architecture "Vera Rubin" platform. Samsung Electronics and SK hynix will also attend GTC to share outcomes of their collaboration with Nvidia.
On the 18th, U.S. company Micron is also scheduled to report earnings, which will offer a read on global memory demand.
Jeong Hae-chang, a researcher at Daishin Securities, said, "While market expectations may already be priced into related stocks, the Nvidia conference is an opportunity not only for product announcements but also to validate the sustainability of the artificial intelligence (AI) investment cycle, which has been a recent concern."
In addition, this week marks the start of the full-fledged shareholders meeting season for domestic listed companies. As the season begins after a series of amendments to the Commercial Act emphasizing improvements in corporate governance and expanded shareholder returns were passed, experts said the atmosphere is likely to differ from previous years.
Lee Sang-jun, a researcher at NH Investment & Securities, said, "Some corporations will amend their articles of incorporation to defend management rights, while others will proactively expand shareholder returns," adding, "As shareholder activism strengthens, expectations for resolving the 'discount (undervaluation)' in the Korean stock market could expand again."
The researcher added, "While geopolitical risks are likely to increase market volatility, events such as the Nvidia conference are expected to reconfirm that there is upside potential for the Korean stock market," and "When the index falls, we recommend using it as an opportunity to increase allocations to leading sectors such as semiconductors, power, securities, and holding companies."