Weaker-Than-Expected U.S. CPI... Will It Propel KOSPI Rebound?

# South Korean Markets Forecasted to Gain Momentum Following US CPI Data Seoul—A recent dip in the United States' February Consumer Price Index (CPI) has created a positive outlook for South Korean stock markets. The lower-than-expected inflation data has eased concerns about stagflation, a combination of economic stagnation and high inflation. According to the financial investment industry on March 13, the U.S. February CPI rose by 2.8% year-on-year, slightly below the expected 2.9%. The month-on-month CPI increase was 0.2%, also underperforming the forecast of 0.3%. The CPI growth rate had shifted from a low of 2.4% in September to increases of 2.6% in October, 2.7% in November, 2.9% in December, and 3.0% in January. The recent figures mark the first decline in four months. The core CPI, which excludes volatile food and energy prices, increased by 3.1% year-on-year, undershooting the 3.2% prediction and down from January's 3.3%. The core CPI's 3.1% rise is the lowest since March 2021's 2.9%. This CPI report precedes the U.S. Federal Open Market Committee (FOMC) meeting scheduled for March 18-19. With inflationary pressures easing last month, there is speculation that the Federal Reserve may accelerate interest rate hikes. Overnight, Wall Street largely reacted positively to the February CPI results. The Dow Jones Industrial Average fell by 0.20%, but the Nasdaq Composite surged over 1%, and the S&P 500 increased by 0.49%. Mirae Asset Securities analyst Suh Sang-young noted, "U.S. stocks opened higher after the CPI increased by only 0.2% month-on-month. Investor sentiment improved significantly, with previously underperforming stocks like Tesla (+7.60%) and Nvidia (+6.43%) making substantial gains." Suh also highlighted that volatility surged when the Trump administration announced tariffs on steel and aluminum, prompting retaliatory tariffs from the European Union. Despite this, he stated, "These were anticipated actions, and late-session gains in recently declining stocks led to a positive close. The Dow slightly dipped due to underperformance in some sectors." South Korean markets are expected to see an inflow of relief from this data. Kiwoom Securities analyst Han Ji-young commented, "Given the consequences the market would have faced if CPI was higher than expected, the below-consensus CPI is a welcomed stimulus. Recent concerns over inflation-induced stagflation have shaken U.S. market health, but February CPI acted as a detox."