It all comes down to semiconductors: Kospi's next move hinges on FOMC minutes, Samsung and SK Hynix shares

All eyes are on whether the Kospi can extend its semiconductor-led rally next week after clearing a key US inflation hurdle. The release of the Federal Open Market Committee minutes and movements in global oil prices are the main variables for the market, even as strong earnings from AI infrastructure companies and continued foreign capital inflows provide support.

According to Korea Exchange, the Kospi closed Friday at 6,977.94, up 164.60 points, or 2.42 percent, from the previous session. For the week of Aug. 10 through Friday, the Kospi gained 11.49 percent while the Kosdaq rose 8.24 percent.

The domestic market's rebound this week was driven largely by US inflation data that eased concerns about interest rates. The US consumer price index for July rose 3.4 percent year-on-year, in line with market expectations, while the core CPI slowed to 2.5 percent from the previous month. The July producer price index came in flat at 0.0 percent month-on-month, falling short of the 0.2 percent gain the market had forecast, further reducing fears of additional rate increases.

Concerns about semiconductor earnings also subsided. According to the Korea Customs Service, exports from Aug. 1 through Monday totaled $21.3 billion, a 45.3 percent increase from the same period a year earlier and the highest figure on record for that period. Semiconductor exports led the way, surging 155.4 percent year-on-year to $10 billion.

Strong results from US AI infrastructure companies also helped ease fears of slowing demand. CoreWeave, an AI cloud provider, posted second-quarter sales of $2.58 billion, up 112 percent year-on-year, marking a record high for the fifth consecutive quarter. The company also raised its annual capital expenditure guidance to $35 billion to $39 billion, from a prior range of $31 billion to $35 billion.

Server manufacturer Super Micro Computer reported adjusted earnings per share of $1.70 for its fiscal fourth quarter (April–June), beating the market consensus of $1.59. Sales nearly doubled to $11.1 billion from $5.7 billion in the same period a year earlier. The company said it had secured more than $60 billion in new orders and that its order backlog had reached a record high.

"The recovery in semiconductor leadership is underpinned by strong Korean exports and robust demand and investment in AI chips," said Lee Gyeong-min, a researcher at Daishin Securities. "If interest rate pressures ease further as concerns about the semiconductor cycle settle down, the Kospi's valuation normalization could continue."

Foreign capital is also flowing back into the Kospi. According to Korea Exchange, foreign investors net purchased 7.84 trillion won ($5.54 billion) on the main board from Monday through Friday. After shifting toward the Kosdaq in early August, foreign buying has returned to the Kospi, concentrating on large-cap semiconductor stocks.

Next week, attention turns to the release of the July FOMC minutes on Thursday. The minutes are expected to shed light on the Fed's internal assessment of inflation and the direction of future rate policy, making them a key variable for market interest rates. While recent employment and inflation data have reduced rate concerns, a stronger-than-expected hawkish tone could push market rates higher again.

"The importance of the minutes has grown as the FOMC has scaled back its forward guidance on monetary policy," said Kang Jin-hyeok, a researcher at Shinhan Investment. "While market volatility has recently calmed and foreign buying has resumed, investors should remain alert to the possibility that markets could become more sensitive to any hawkish remarks from the Fed."

The outcome of US-Iran truce negotiations and whether the Strait of Hormuz reopens are also variables to watch. With West Texas Intermediate crude holding above $80 per barrel, the US 10-year government bond yield has struggled to fall below the 4.6 to 4.7 percent range. Progress in negotiations between the two countries that stabilizes oil prices could ease pressure on market interest rates.

"With no major events such as CPI releases or big-tech earnings scheduled next week, the market could be exposed to short-term volatility depending on how US-Iran negotiations develop," Lee said. "If progress is confirmed on Strait of Hormuz transit, risk appetite could strengthen further."

NH Investment set its Kospi forecast range for next week at 6,200 to 7,200 points, citing a recovery in earnings credibility and easing share price volatility as upside factors, and profit-taking selling pressure as a downside risk.

"As doubts about upstream AI demand have settled, confidence in the sustainability of memory chip earnings is also rising," said Na Jeong-hwan, a researcher at NH Investment. "In a phase where confidence in earnings is recovering, we expect the upward trend to continue, centered on semiconductor and other AI capital expenditure leaders."