Will Seoul's Rally Fizzle Out? KOSPI at Critical Crossroads

Seoul’s stock market bounced back Thursday after getting hammered for two straight days—wiping out nearly a 4% loss that had sent the index tumbling almost 160 points. The KOSPI clawed back to 4,004.85, up 1.92%, finally holding above that psychological 4,000 barrier. But here’s the thing: all those gains could evaporate on Friday.

Why? Wall Street just took a beating. Despite Nvidia’s solid earnings giving early optimism, the U.S. markets couldn’t hold it together. The S&P 500 dropped 1.56%, NASDAQ crashed 2.15%—and that’s a major red flag for Asian markets.

The Real Culprit: Interest Rate Confusion

The September jobs report threw a wrench into rate-cut expectations. Yes, unemployment ticked up slightly, but job growth smashed estimates—way stronger than expected. That mixed signal has traders second-guessing whether the Fed will actually cut rates again in December. The probability tanked from 98.8% a month ago to just 39.8% now. That’s a massive shift in market sentiment.

Seoul Bright Spots (For Now)

Tech stocks and steel names led Thursday’s recovery:

• Samsung Electronics: +4.25%
• NAVER: +3.42%
• KEPCO: +3.60%
• POSCO Holdings: +2.55%
• SK Hynix: +1.60%

But the weakness in autos (Hyundai, Kia down) and financials (KB Financial, Hana Financial) suggests not everyone’s buying the rally.

Bottom Line

With crude oil also sliding and U.S. futures likely to set a negative tone, the KOSPI might struggle to hold its gains into the close. The real question: was Thursday’s bounce a floor or just a dead cat bounce? The answer probably comes down to what Wall Street does tonight.