US Stock Market Closes Mixed Amid Tech Surge, Kospi Retreats Below 4,200   (C) Pixabay

The US stock market concluded with mixed results despite a robust performance from key artificial intelligence (AI)-related technology stocks. Meanwhile, the Kospi index experienced a cooling-off period, dipping below the 4,200-point mark during morning trading as foreign and institutional investors engaged in synchronized selling.

On November 3 (local time), the Dow Jones Industrial Average finished 0.48% lower than the previous trading day. Conversely, the S&P 500 index and the Nasdaq Composite index saw gains, rising 0.17% and 0.46%, respectively. This divergence in performance was attributed to strong showings by AI-related tech stocks, offsetting lackluster results from a majority of other companies.

Microsoft (MS) provided a significant tailwind for the tech sector by announcing a $7.9 billion investment in AI infrastructure in the United Arab Emirates (UAE) through 2029. This news propelled Nvidia's stock price up by 2%, allowing the company to reclaim a market capitalization of $5 trillion. Crucially, MS secured permission from the US government to export the necessary Graphics Processing Units (GPUs) for AI computation to the UAE. This development opens a potential Middle Eastern export avenue, particularly relevant given current restrictions on GPU exports to China.

Additionally, Amazon shares climbed 3% following a new seven-year cloud usage contract with OpenAI. This major deal served as a positive catalyst despite existing market concerns about the profitability of OpenAI and the potential for several Big Tech companies to become systemically entangled, perhaps creating a "too big to fail" scenario.

In contrast, Meta's stock continued its decline for the third consecutive trading day. The company's recent earnings were impacted by a one-time tax expense, and its announcement to issue corporate bonds to finance further AI investment raised market eyebrows. The continued skepticism surrounding an "AI bubble" suggests that even minor blemishes on Meta’s "growth narrative" are being viewed with considerable caution by investors.

Despite the strong momentum in US tech stocks, the Kospi index started the day lower on November 4. This retreat was largely seen as a breather following mounting concerns over market overheating, exemplified by SK Hynix's double-digit surge the previous day. As of 11:00 AM KST, the Kospi was trading in the 4,150 range, approximately a 1.5% drop from the previous closing price. Foreign investors net-sold roughly 1.3 trillion won, and institutions net-sold 400 billion won. Individual investors, however, absorbed this selling pressure, net-buying around 1.7 trillion won.

The "two giants" of the domestic semiconductor industry, which recently broke the 110,000 won and 600,000 won thresholds, experienced a synchronized decline. Samsung Electronics dropped 2%, while SK Hynix fell in the 4% range. Other sectors that had recently experienced significant gains, such as shipbuilding and defense, also saw their stock prices decrease.

Conversely, capital flowed into the previously struggling biotech sector, leading to a strong rally. Key Kosdaq-listed biotech firms, including Alteogen, HLB, Peptron, and ABL Bio, all posted gains, with HLB soaring nearly 20%. As a result, the Kosdaq index was trading in the 930s, an increase of about 1.5% from the previous close. In the Kosdaq market, foreign and institutional investors were net buyers, while individual investors were net sellers.