[Edaily Kim Kyung-eun Reporter] While the KOSPI rebounded despite the U.S. Federal Reserve’s interest rate hike, market opinions are divided on the future direction of the stock market. Although concerns over the rate hike have already been largely priced in, leading to expectations that the market will resume its upward trend on the back of strong earnings, caution regarding a global liquidity crunch remains. Among securities analysts, forecasts are divided: some predict the KOSPI will remain within a trading range until the first half of next year, while others expect it to break through the 8,000 mark and head toward historic highs.

According to MP Doctor on the 20th, the KOSPI closed at 6,894.23 on the 18th, up 178.82 points (2.66%) from the previous trading day. In particular, foreign investors returned to net buying for the first time in eight trading days, and the index briefly recovered the 6,900 level during the session. This is interpreted as a result of improved investor sentiment following the September Federal Open Market Committee (FOMC) meeting, as U.S. Treasury yields and international oil prices have stabilized.

The market is watching closely to see if this rebound will lead to a resumption of the upward trend. This comes as some analysts interpret the U.S. Federal Reserve’s (Fed) decision to raise interest rates for the first time in three years and two months as having actually resolved uncertainty surrounding monetary policy. At the FOMC meeting on the 16th (local time), the Fed raised the benchmark interest rate by 25 basis points (0.25 percentage points) to a range of 3.75% to 4.00% per annum. Given that FedWatch had put the probability of a 25-basis-point rate hike at 93.5% immediately prior to the September FOMC meeting, this move is assessed as not having come as a shock to the market.

In fact, the outlook for the terminal policy rate has actually become more dovish following the FOMC meeting. Initially, the market had priced in the possibility that the policy rate would rise to 4.5–4.75% annually through four rate hikes by the first half of 2027. However, following the FOMC meeting, expectations shifted toward the cycle ending in the first half of 2027 at a range of 4.25–4.5% annually.

Lee Kyung-min, an analyst at Daishin Securities, explained, “This rate hike has restored confidence in monetary policy and price stability,” adding, “This shift comes after the market had long treated rate hikes as a foregone conclusion and had already priced in hawkish rate hikes.”

Historical data also shows that interest rate hikes do not immediately lead to stock market declines. According to Kiwoom Securities, there have been a total of six Fed rate hike cycles since 1994, during which the KOSPI recorded an average return of 9.1%. The analysis suggests that the intensity of subsequent monetary tightening and the direction of corporate earnings had a greater impact on the stock market than the rate hikes themselves.

The analyst noted, “As the market digests a hawkish FOMC, we should factor in a test of the KOSPI’s support level at 6,600,” but added, “Once concerns over hawkish monetary policy—which have already been priced in—are fully absorbed, this presents an opportunity to prepare for the start of the full-fledged earnings season.” He added, “Micron’s earnings release at the end of September, South Korea’s September import and export figures on October 1, and Samsung Electronics’ earnings guidance in early October are all on the horizon,” and predicted, “In the short term, we expect the index to move toward the mid-to-high 7,000 range, and over the long term, toward the high 8,000 range, approaching its all-time high.”

On the other hand, there are counterarguments that investors must prepare for a deterioration in liquidity conditions following interest rate hikes. The analysis suggests that, with the interest rate cut cycles in major economies having ended and the Fed now joining the ranks of those raising rates, liquidity conditions surrounding risky assets have worsened compared to before.

The recent debate over “AI speed control”—which has shaken the market—is also cited as a key variable that will determine the future direction of the stock market. While concerns have somewhat subsided given the robust AI investment cycle, it remains unclear whether large-scale investments can be sustained amid high interest rates. In particular, as the use of leverage increases in the process of AI infrastructure investment, the liquidity environment is considered a critical variable for AI investments as well.

Jeong Da-un, an analyst at LS Securities, said, “While the first half of the year was a market that focused on cash-based investments by hyperscalers and was enthusiastic about semiconductors—which recognize those investment funds as revenue—that is no longer the case,” adding, “A range-bound trend is expected through the first half of next year.”

Kim Yu-mi, an analyst at Kiwoom Securities, also predicted, “For the time being, we need to pay attention to how financial markets digest the possibility of prolonged high interest rates,” adding, “It is highly likely that we will see a repeated cycle of expectations for expanded AI investment and the subsequent verification of the profitability and funding conditions that support it.” She further noted, “It will be difficult for the short-term direction of key price variables, such as interest rates and the dollar, to become clearly defined.”