A portion of an official video showing the U.S. Central Command striking an Iranian coastal surveillance radar base on the 6th (local time) [Photo=Yonhap News]

The theme of this week's trend is "retreat from reassurance."

Last week, Money Radar posed three questions:

△ Whether reports of progress in U.S.-Iran negotiations would actually lead to stability in the Strait of Hormuz,

△ Whether the won-dollar exchange rate would stabilize below 1500 won,

△ How a decrease in oil prices would affect the supply and demand in the airline, chemical, transportation, and semiconductor sectors in the Korean stock market.

This week, the market provided tentative answers to all three questions.

Stability in the Strait of Hormuz has not been confirmed. 

On the 1st, West Texas Intermediate (WTI) crude oil fell to the $87 range, reflecting negotiation expectations, but on the 2nd, it surged to the $92 range due to Iran's declaration of halting negotiations and concerns over blockading the Strait of Hormuz.

On the 4th, news of renewed U.S.-Iran military conflict further pushed prices up to the $96 range. Although prices fell back to the $93 range on the 5th, this was closer to a price reaction indicating a temporary decrease in the possibility of escalation rather than stability.

The exchange rate pointed in the same direction.

Last week's key point was whether the won-dollar exchange rate would stabilize below 1500 won.

However, this week, the won-dollar exchange rate started in the 1504 won range, climbed to the 1513 won and 1535 won ranges, and recorded 1532 won on the 5th. Stabilization below 1500 won was not achieved.

Even if Korean assets showed a temporary strong rebound, the exchange rate indicated that foreign capital does not view the Korean market as a risk-free zone.

This week, Money Radar has one question:

"Did the market buy reassurance, or did it first drive up prices before confirming reassurance?"

The New York stock market did not provide a consistent answer throughout the week.

On the 1st, Dell Technologies' earnings and demand for AI servers boosted tech stocks. On the 2nd, Nvidia's unveiling of AI semiconductors for personal computers (PCs) revived investor sentiment.

However, on the 4th, Middle East tensions and rising interest rates pulled down the indices, and on the 5th, the Dow Jones Industrial Average rose strongly, but the NASDAQ Composite underperformed due to the Broadcom shock. While the indices held steady, leading stocks faltered.

Three structures were confirmed in this week's market.

First, Middle East risk has not disappeared but is fluctuating within prices.

Oil prices fall when negotiation expectations arise and jump again when conflict news emerges. This suggests that the market does not view war as the base scenario but also lacks the confidence to completely lower energy prices.

Second, the key variable for the Korean market remains the exchange rate.

Although the iShares MSCI South Korea ETF (EWY), a U.S.-listed Korean exchange-traded fund, and the KOSPI 200 nightly futures saw a strong rebound on the 2nd, EWY fell significantly on the 5th.

As long as the exchange rate fails to move below the 1530 won range, the rebound in the Korean stock market is likely to be interpreted as a short-term price recovery rather than a structural return of foreign capital.

Third, the AI rally continues, but its nature is changing.

Dell, Nvidia, AI PCs, servers, and data centers remain the central language of the market. However, the sharp declines in Broadcom and Micron Technology showed that the market is now scrutinizing "which asset's lifespan is longer within the AI investment cycle" rather than "everything rises if it's AI."

The conclusion of this week's trend is simple. 

"The market has not abandoned AI yet, but the Middle East and the exchange rate have not allowed for reassurance."

Next week's observation points are threefold.

First, we need to see if the won-dollar exchange rate falls from the 1530 won range and returns to the early 1500 won range.

Second, we need to confirm if WTI falls below $90 again, reflecting the easing of Hormuz risk in prices.

Third, we need to watch whether the semiconductor adjustment after the Broadcom shock is a temporary profit-taking or evolves into a debate about the lifespan of AI infrastructure assets.

※ This article is a market commentary to aid understanding and is not investment advice. Actual market and stock prices may vary depending on variables such as exchange rates, interest rates, oil prices, earnings, policies, and supply and demand.