This week (the 8th–12th), Korea's stock market is expected to be influenced by the release of U.S. inflation data and SpaceX's initial public offering (IPO).
SpaceX is preparing the largest-ever IPO on the Nasdaq on the 12th. Through the listing, SpaceX plans to raise about $75 billion (about 112 trillion won), and its corporations value at listing is estimated to reach up to $1.75 trillion (about 2,662 trillion won).
With the recent sharp decline in U.S. stocks led by artificial intelligence (AI) and semiconductor technology shares, there is also a possibility that the domestic market will show weakness centered on semiconductor corporations.
On the 5th (local time), all three major New York indexes—the S&P 500, the Dow Jones Industrial Average, and the Nasdaq composite—fell from the previous trading day. The Standard & Poor's (S&P) 500 index fell 2.64% to 7,383.74. The Dow Jones and Nasdaq composite also fell to 50,866.78 and 25,709.43, down 1.35% and 4.18%, respectively.
The Philadelphia Semiconductor Index plunged 10.3% that day, the biggest drop since April last year. Micron Technology fell 13.25%, and SanDisk and Western Digital also fell 11.39% and 11.06%, respectively. Intel and AMD likewise fell 11.28% and 10.86%.
The U.S. May consumer price index (CPI) and producer price index (PPI), to be released on the 10th and 11th, respectively, are also cited as key variables. Bloomberg expected the U.S. May CPI to rise more than 4% from a year earlier. As these inflation indicators are being released ahead of the Federal Open Market Committee (FOMC) rate decision on the 17th, brokerages said market sensitivity is likely to be high.
Lee Sang-jun, an NH Investment & Securities researcher, said, "In the short term, Korea's stock market could see a volatile trend due to concerns over rising inflation and exchange rates, supply-demand worries from the SpaceX listing, and a lull in earnings momentum."
However, as global big tech companies such as Alphabet, which will report second-quarter results from mid-month, show strong investment appetite, the view remains dominant that domestic AI infrastructure beneficiaries will continue to lead the market.
Lee Jae-won, a Yuanta Securities Korea researcher, said, "It is still difficult to see the AI infrastructure investment cycle as showing a trend-damaging signal," adding, "Profit-taking appeared after Broadcom in the United States released results, but this is more a disappointment stemming from guidance not being raised enough versus heightened expectations than a slowdown in AI demand."
Researcher Lee Jae-won added, "Alphabet's large-scale expansion of capital expenditures (capex) can be interpreted as a sign of prolonged AI infrastructure investment," and "If demand for AI services continues to outstrip supply capacity, a positive view of Korea's value chain—including HBM, memory, AI servers, and power infrastructure—will be maintained."
Researcher Lee Sang-jun also said, "Recently, Alphabet said it is pushing a $80 billion rights offering to secure funds for AI infrastructure investment," adding, "As big tech shows strong willingness to invest in AI through announcements of funding plans, Korea's AI infrastructure investment benefits are also expected to continue."
NH Investment & Securities projected the KOSPI would move in a range of 7,800 to 8,900 points this week.
Last week (June 1–5), the domestic stock market hit a record high as the KOSPI pierced the 8,800 level, fueled by Nvidia CEO Jensen Huang's visit to Korea and a rally led by large caps. On news of CEO Jensen Huang's visit, corporations expected to form AI partnerships with Nvidia, such as Samsung Electronics and SK hynix, pulled the index higher.
However, as the index gains were concentrated in a few semiconductor corporations, a tilt emerged and volatility was high. On the 5th alone, the KOSPI plunged more than 5% from the previous trading day, sliding to the 8,100 level. The KOSDAQ also fell more than 4% in a day, dropping below the 1,000 level.