Already the 11th ‘sidecar’ trigger this year… Markets watch Trump’s address to the nation [Today’s Market Preview]

All three major U.S. stock indexes rise

Trump and Iran signal willingness to end the war

With expectations growing that the war between the United States and Iran will move toward an end, South Korean stocks are expected to open higher on the 2nd. After a sharp rally the previous day triggered the year’s 11th “sidecar,” the market is focusing on President Donald Trump’s address to the nation at 10 a.m. on the 2nd. Analysts say equities could be significantly affected depending on whether U.S. forces withdraw and whether the Strait of Hormuz is reopened.

The previous day, the Kospi surged as expectations spread that the U.S.-Iran war would soon end. On the 1st, the Kospi closed at 5,478.70, up 8.44%. It had fallen 4.26% the day before, sliding to as low as 5,050, before rebounding in just one session. It was the highest level in a week since the 25th of last month (5,642.21).

Large-cap semiconductor shares such as Samsung Electronics (13.40%) and SK hynix (10.66%) led the rally. In terms of the gain, it was the biggest since the 5th of last month (9.63%), when a rebound emerged early in the war. The Kosdaq also jumped 6.06% to close at 1,116.18.

Overnight, New York stocks also rose as optimism about an end to the war resurfaced. The Dow Jones Industrial Average rose 0.48% from the previous session to close at 46,565.74. The Standard & Poor’s (S&P) 500 gained 0.72% to 6,575.32, while the tech-heavy Nasdaq Composite rose 1.16% to 21,840.95.

The three major U.S. indexes had extended a month-long decline since the outbreak of the U.S.-Iran war, but have now managed to rebound for a second straight day. The surge in memory names such as Micron (+8.9%) and SanDisk (+9.0%) also played a major role. The MSCI Korea ETF rose 2.61%, and the MSCI Emerging Markets ETF added 0.77%. Kospi overnight futures rose about 1.6%.

Expectations that the Iran war could end soon were heavily priced in. Although President Trump and Iran traded barbs over ceasefire talks, the fact that neither side wants a protracted conflict came into focus. Trump wrote on his social media platform Truth Social, “Iran’s New Regime President just asked the United States for a ceasefire.” Earlier, he mentioned “within 2 to 3 weeks” as the timeframe for ending military operations against Iran.

Iran said Trump’s claim of a “ceasefire request” was not true. Still, it signaled an intention to end the war. In an open letter addressed to Americans, President Masoud Pezeshkian said, “Continuing down the path of confrontation is more costly and meaningless than ever,” adding that Iranians “harbor no hostility toward any other country, including the United States, Europe, and neighbors.”

The won-dollar exchange rate showed a rebound in overnight trading. After closing daytime trading the previous day at 1,501.30 won, the rate rose to as high as 1,513.30 won in the overnight regular session. International oil prices eased. West Texas Intermediate (WTI) crude futures for May delivery fell 1.2% from the prior session to settle at $100.12.

Han Ji-young, a researcher at Kiwoom Securities, said, “The Kospi is likely to start higher, but after President Trump’s address to the nation, volatility is expected to increase as investors watch the direction of oil prices and moves in U.S. futures markets,” adding, “Maintaining exposure to existing positions centered on leaders and responding at a slow pace would be a realistic alternative.”

Bae Seong-su, baebae@hankyung.com