[Market View] U.S. Stock Market Trapped in Tariff Fears… KOSPI Searching for Rebound Catalysts "Frustrating"

# Trump: "Will Not Bend on Tariff Policy"; New York Stock Market Plunges Again # U.S. PPI Slows in February, Markets Unfazed; Unstable Start Expected for KOSPI (Seoul = Yonhap News) By Kwak Yoon-ah - The domestic stock market is expected to start on a shaky note on the 14th, influenced by another sharp decline on Wall Street triggered by tariff fears from President Trump. Overnight in New York, the Nasdaq Composite Index plunged by 1.96%, while the Dow Jones Industrial Average and the Standard & Poor's (S&P) 500 Index fell by 1.3% and 1.39%, respectively. Despite the closely watched U.S. Producer Price Index (PPI) for February remaining flat from the previous month and falling short of expectations, the market wavered under the persistent tariff threats from the Trump administration. President Donald Trump stated, "I will not bend" on tariff policy, while U.S. Treasury Secretary Scott Bescent remarked, "I am not concerned about the minor (market) volatility over the past three weeks." Initially, the market expected tariffs to be merely a negotiating tool and believed that maintaining a strong tariff stance would be difficult considering economic factors. However, concerns over an escalating trade war and subsequent economic downturn are now hard to shake off. Additionally, the impending budget processing deadline (February 14) in the U.S. Congress, which remains uncertain, added to the negative sentiment. As a result, major technology stocks and cyclical stocks, including Tesla (-2.99%), Apple (-3.36%), Alphabet (-2.6%), and Microsoft (-1.17%), declined. Nvidia fared relatively better, falling just 0.14% ahead of next week's 'GTC 2025.' For the domestic stock market, it is a continuation of a frustrating situation. Although the KOSPI index turned downward intraday due to the expiration of futures options, closing at 2,573.64, down 0.05%, the overall recent sentiment has not been bad. Weekly performance shows a significant contrast: the Nasdaq fell 4.91% this week, while the KOSPI managed to rise 0.39%, maintaining a resilient trend. The issue is that without a rebound in the New York stock market due to easing U.S. recession concerns and inflows of foreign capital into the domestic market, a significant rebound will be challenging. Moreover, with President Yoon Seok-yeol's impeachment verdict approaching, the prevailing view is that the KOSPI will continue to move within a range, checking the upper limit around 2,600 for the time being. Kim Ji-hyun, an analyst at Daol Investment & Securities, stated, "If the February U.S. retail sales data to be released next week show weakness, the stock market could see increased volatility due to recession concerns," adding, "It will also be difficult to expect a continuous index trend as the market remains sensitive to tariff policies." Kim Ji-won, an analyst at KB Securities, commented, "While the domestic stock market continues to show relative strength compared to the U.S., we must be mindful of the potential for heightened political risks." ori@yna.co.kr