NVIDIA's Decline Rocks Korean Stock Market… This Week's PCE Inflation and Jackson Hole in Focus

The primary reason for NVIDIA's recent stock price decline is interpreted as market pressure due to increased AI server prices. The market believes that the burden from NVIDIA raising AI server prices has played a role. In this situation, whether the increase in memory prices can be passed on to customers will be a key verification point for the future semiconductor market. It is expected that a clear direction for the stock market will be difficult to ascertain until NVIDIA's earnings are announced.

This week, the market is expected to show significant volatility due to three major economic events. First, on August 26, the US July Personal Consumption Expenditures (PCE) Price Index will be announced, which will significantly influence future Federal Reserve (Fed) interest rate decisions. Additionally, NVIDIA's earnings announcement is scheduled, and its impact on the domestic stock market, including domestic semiconductor-related stocks, is drawing attention. Finally, the Fed Chair's remarks on interest rates at the Jackson Hole meeting could be a crucial factor in determining the overall market valuation next month.

Former President Donald Trump announced that tariffs on Canadian automobiles, trucks, and auto parts would increase by 50% starting January 1, 2027. Canada retaliated by stating it would impose retaliatory tariffs on US products starting September 8, signaling the full-scale commencement of a tariff war between the two countries. Such tariff measures could directly harm US auto companies like GM and Ford, which are deeply intertwined in global supply chains, and may also act as a psychological burden and risk for the domestic automotive industry.

Samsung Electronics is facing difficulties in implementing shareholder return policies, such as treasury stock incineration, due to issues related to the Financial Industry Structure Improvement Act. This situation may make a short-term rebound in Samsung Electronics' stock price challenging. However, some analyses suggest that the current stock price weakness could be a good opportunity to buy Samsung Electronics at a low point from a long-term perspective.

As semiconductor stocks weakened in the US market, the domestic stock market also could not avoid the shock from the opening. The MSCI Korea index and night futures also reflected a decline, showing a weakened overall market sentiment. Usually, when large-cap stocks fall, other stocks also decline, putting pressure on the index, but in the current market, a supply and demand rotation flow is being observed where funds moving out of large-cap semiconductor stocks are shifting to other sectors. Investors need to carefully monitor these shifts in supply and demand to formulate investment strategies. This could suggest that overall market liquidity is not entirely exiting despite the decline in large-cap stocks but rather dispersing into other sectors.