This week, from the 22nd to the 26th, the stock market is expected to be heavily influenced by Micron's earnings. As Central Bank policies in major economies turn more hawkish to fight inflation, Micron's report could be a watershed in gauging whether the semiconductor-led rally will continue.
Lee Jae-won of Yuanta Securities Korea said, "With U.S. monetary policy discussions and the U.S.-Iran end of war, among other geopolitical risks, largely digested, the market's focus will shift back to second-quarter earnings and whether earnings per share (EPS) estimates are revised up."
On the 22nd, Korea's export-import trend for this month (the 1st to the 20th) and the United States' May personal consumption expenditures (PCE) inflation data will also draw investor attention.
Last week, the KOSPI index topped 9,000 points for the first time ever, extending a historic rally. Investors are focused on whether the rally led by Samsung Electronics and SK hynix will continue this week.
In particular, analysts say Micron's earnings, due around 5 a.m. on the 25th before Korea's market opens, will have a major impact on the market. Micron's results could serve as a gauge not just of a single corporation's performance but of the broader global semiconductor cycle.
Kang Jin-hyuk of Shinhan Investment & Securities projected, "If Micron's upward earnings revisions are confirmed while the semiconductor cycle is accelerating in both price and volume, the rally will likely continue as AI risk appetite recovers and macro concerns are overshadowed."
Cho Byung-hyun of Daol Investment & Securities said, "Micron is a key beneficiary of the AI memory semiconductor supercycle and a leading indicator to check the earnings direction for Samsung Electronics' and SK hynix's HBM and DRAM," adding, "With concerns of an industry 'peak-out' emerging after Broadcom's earnings, attention should focus not only on results but also on profitability and next-quarter guidance."
The market expects Micron's fiscal 2026 third-quarter revenue at $35.0 billion, operating profit at $27.0 billion, and earnings per share (EPS) at $19.98.
Meanwhile, the Federal Reserve signaled the possibility of rate hikes at this month's Federal Open Market Committee (FOMC) meeting as it expressed caution about inflation. With monetary policy decisions expected to be data-dependent, investors are turning to price indicators.
Kim Yu-mi, an economist at Kiwoom Securities, said, "Following the June FOMC, the market will likely continue trying to confirm the Fed's monetary policy direction," adding, "As the Fed emphasized its commitment to price stability, market attention will concentrate on inflation indicators."
The U.S. May PCE price index, due on the 25th, is expected to rise 4.1% year over year and 0.5% month over month. If it matches expectations, the shock to financial markets will likely be limited, but if it exceeds forecasts, concerns over rising rates could widen again.
Remarks by the New York Federal Reserve president and the Chicago Federal Reserve president, scheduled for the 26th, are another variable. With no clear signs yet of slowing inflation and Central Banks in major economies maintaining a tightening stance, the pace of a stable decline in interest rates is likely to be limited.
Meanwhile, a "tectonic shift" is expected among top market capitalization stocks on the Korea Exchange. Recently, SK hynix has been quickly narrowing the market cap gap with Samsung Electronics. Also, Samsung Life Insurance, boosted by a sharp rise in its stock price, overtook LG Energy Solution to jump to No. 6. As sector-specific flows change, competition among top-tier stocks by market cap is expected to intensify.
By contrast, the relative slump in the KOSDAQ market is likely to continue. As investment funds concentrate in large-cap semiconductor and AI-related names, the KOSDAQ remains sidelined. Lee Jae-won said, "The KOSDAQ will remain at a disadvantage until we see the return of individual investor flows and a rebound in earnings estimates," adding, "The strategy is compression over diffusion."