Korean stock futures climbed despite the US Federal Reserve’s decision to keep benchmark interest rates unchanged for the third consecutive meeting. Internal divisions at the Fed and anticipation for major US tech earnings kept gains in check, with markets trading in a tight range.
Kospi Posts Strong Gains for Third Session
The Kospi index surged 0.75%, marking its third straight daily advance and the strongest investor sentiment in recent sessions. Kospi 200 futures rose 0.33%, while the Kosdaq added 0.39%. Early momentum came from easing worries over potential Trump-era tariffs, upbeat OpenAI developments, and pushes toward intraday highs near key psychological levels.
Profit-taking followed disappointing US corporate earnings disclosures, prompting caution across major indices. Kospi futures touched April lows ahead of the FOMC outcome and Big Tech quarterly results, though foreign and institutional buying cushioned the downside.
Fed Signals Hawkish Stance with Rate Freeze
Officials held rates steady but showed dissent, with four members opposing the decision. Notably, three policymakers—Harker, Kashkari, and Logan—supported the freeze yet criticized the statement for dropping references to an “easing bias.” This hawkish tone raised US 10-year Treasury yields, pressuring stock valuations.
US markets ended mixed: the S&P 500 dipped 0.04%, Nasdaq edged up 0.04%, and the Dow fell 0.57%. Persistent uncertainty around Big Tech performance overshadowed broader positive cues from tariff cooperation talks.
Big Tech Earnings Disappoint Globally
Cloud computing leaders Alphabet and Amazon saw sharp declines outside Korea, dragging sentiment. Microsoft disappointed on cloud metrics despite two major deals, while Nvidia maintained optimism amid hosting revenue beats. Meta reported robust user growth, bolstering its position.
Anthropic advanced past OpenAI with a $9 billion investment round, fueling data center chip demand from Qualcomm and others. Korean tech firms outperformed, with standout gains in shipbuilding-related stocks like LS Electric and Hyundai Rotem on fresh contract wins.
Narrow Trading Range Persists
Passive selling from index rebalancing added volatility, narrowing average basis point spreads by 2 points from recent highs. Foreign net purchases and institutional inflows supported the Kospi within a $100 band, signaling steady upside potential amid mixed global cues.
Jeong Hye-chan, research director at Samsung Securities, highlights profit-taking in tech disclosures as a key driver, with Korean indices poised for outperformance relative to US counterparts.
