[Edaily Reporter Shin Ha-yeon ] The domestic stock market will resume trading on the 28th following the short Chuseok holiday. During the holiday, the New York Stock Exchange fell before rebounding, while U.S. Treasury yields and international oil prices fluctuated significantly. The key factors expected to determine the direction of the domestic stock market this week are the upcoming U.S. inflation and employment data, as well as Micron’s earnings report.

According to the Korea Exchange on the 27th, the KOSPI closed at 7,080.92 on the 23rd, just before the holiday. Although the index rose 2.71% over the three trading days last week to recover the 7,000 level, foreign investors were net sellers of 419.1 billion won worth of securities on the stock market. Foreign investors were net buyers of 2.5906 trillion won worth of shares in SamsungElectronics(005930), while they were net sellers of 2.2795 trillion won worth of shares in SK hynix(000660), showing divergent trading trends even among semiconductor stocks.

While the domestic stock market was closed on the 24th and 25th, the New York stock market initially fell under pressure from rising interest rates and oil prices but rebounded on the 25th. Compared to the 22nd (local time), just before the holiday, the Dow Jones Industrial Average fell 0.07%, the S&P 500 fell 0.27%, and the Nasdaq fell 0.64%. The Philadelphia Semiconductor Index fell on the 23rd and 24th but rose 1.41% on the 25th.

The key question after the market opens is whether U.S. interest rates will continue their upward trend. The yield on the 10-year U.S. Treasury note surpassed 5.22% during trading on the 25th, hitting a 19-year high. Lee Jae-man, an analyst at Hana Securities, explained, “The yield gap based on the S&P 500 Index stands at 3 bp (1 bp = 0.01 percentage point), the lowest level since 2004, meaning the investment appeal of stocks relative to bonds is on the verge of disappearing.” If economic indicators fuel expectations of further interest rate hikes, growth stocks could face increased pressure.

This week, the U.S. Job Openings and Labor Turnover Survey (JOLTS) will be released on the 29th, followed by the August Personal Consumption Expenditures (PCE) Price Index and private employment data on the 30th, and the September employment report on the 2nd of next month. If employment and inflation figures come in stronger than expected, concerns over further monetary tightening by the Federal Reserve (Fed) will grow, and Treasury yields could spike again.

International oil prices must also be viewed in conjunction with interest rate trends. Oil prices, which had surged on the 23rd and 24th amid tensions in the Middle East, fell on the 25th following reports that Iran had proposed reopening the Strait of Hormuz. On that day, West Texas Intermediate (WTI) crude for November delivery closed at $92.41 per barrel, while Brent crude closed at $104.32. If oil prices stabilize amid continued hopes for a deal, it could ease inflationary pressures; however, if tensions escalate again, it could become a negative factor for both interest rates and the stock market.

The won-dollar exchange rate is another variable that could affect foreign investor sentiment. If the dollar strengthens alongside rising U.S. interest rates, foreign investors’ concerns about exchange rate losses on won-denominated assets could grow. How long the dollar’s strength will last depends on the magnitude of the Federal Reserve’s additional interest rate hikes.

Seo Sang-young, Executive Director at MIRAE ASSET SECURITIES, stated, “The most important factor influencing the stock market this week is whether U.S. inflation and employment data will alter the path for further interest rate hikes following the September Federal Open Market Committee (FOMC) meeting,” adding “From the beginning of the week through the closing price on the 30th, we may see rebalancing-driven supply and demand that causes stock prices and government bond prices to move in opposite directions. If the stock market weakens even as interest rates fall (bond prices rise), this should be viewed separately from a deterioration in fundamentals and attributed to end-of-quarter supply and demand dynamics,” he noted.

Among semiconductor stocks, Micron’s earnings report, scheduled for release on the 30th, is seen as a turning point. The market is expected to focus not only on the earnings figures but also on the company’s commentary regarding high-bandwidth memory (HBM) demand, DRAM and NAND prices, and long-term supply contracts. Even if U.S. semiconductor stocks rebounded on the last trading day of the holiday period, domestic semiconductor stocks will need evidence to support demand outlooks in order to sustain their upward trend.