Samsung Electronics (005930.KS) and SK hynix (000660.KS) were down 2% to 3% in premarket trading (8 a.m. to 8:50 a.m.). Analysts attribute the decline to broad weakness in semiconductor stocks, including Micron — regarded as a "memory weathervane" — amid lingering effects of the Meta-driven shock on the New York exchange.
According to NextTrade, as of around 8:10 a.m. Wednesday, Samsung Electronics was trading at 280,500 won, down 5,500 won, or 1.92%, from the previous session, while SK hynix was at 2.125 million won, down 62,000 won, or 2.83%. SK Square (402340.KS) was trading at 1.45 million won, down 75,000 won, or 4.92%.
The weakness in semiconductor stocks continued from the previous day. When Meta said it would push to sell surplus computing resources externally, concerns spread over overinvestment by Big Tech and a peak-out in chip demand. The previous day, Samsung Electronics plunged 9.06% to slip below the 300,000 won mark, while SK hynix tumbled 14.57% to fall into the 2.1 million won range.
Technology stocks also extended their declines on the New York exchange overnight. Micron Technology fell 5.49%, while other semiconductor stocks also posted large losses, including artificial intelligence (AI) chip leader Nvidia (-1.39%), Broadcom (-2.41%), AMD (-4.26%), Intel (-5.25%) and Marvell Technology (-9.84%).
As a result, the technology-heavy Nasdaq Composite Index fell 0.80%. As funds flowed out into other sectors amid the drop in technology stocks, the Dow Jones Industrial Average rose 1.14%, and the Standard & Poor's (S&P) 500 Index closed flat, up 0.01 point.
US nonfarm payrolls for June increased by 57,000 from the previous month, well below Wall Street's forecast of a 115,000 increase (based on the Dow Jones tally). Wall Street, which had been concerned about mounting inflation pressure from an overheated labor market, saw growing expectations that the US Federal Reserve, led by Chairman Kevin Warsh, would ease its burden of raising rates within the year following the jobs data.
Han Ji-young, a researcher at Kiwoom Securities, said, "Today, supply-demand volatility centered on semiconductor stocks will temporarily rise early in the session due to the continued weakness in the US Philadelphia Semiconductor Index and the burden of the KOSPI 200 night futures being down around 1%." Still, she projected, "The market will show a recovery flow during the session, supported by a retreat in expectations for a Fed rate hike in September and the inflow of buying on the perception that the previous day's plunge of around 7% was excessive."
