[Anchor]
We are paying close attention to the U.S. midterm election results because they will have a significant impact on our economy. A Republican victory is expected to bring tariff pressure, while a Democratic win is likely to fuel concerns over semiconductors.
Reporter Lee Seong-hoon breaks down the key points to watch in this election.
[Reporter]
Today (November 3), the KOSPI plummeted another 3.6%, slipping back to the 5,600 range.
In particular, semiconductor heavyweights Samsung Electronics and SK Hynix both dropped by more than 4% and 5%, respectively. This is attributed to growing concerns over the profitability of AI investments, coupled with cautious sentiment spreading over a potential Democratic victory in the U.S. midterm elections.
The U.S. midterms are seen as a variable that will influence not only the investment direction of the AI industry but also the domestic stock market.
This is because regulatory directions could shift depending on the election outcome.
If the opposition Democratic Party wins, the semiconductor industry could feel the impact first.
The Democrats maintain the stance of slowing down AI development until safety is secured and strengthening regulations on the construction of data centers due to environmental concerns.
[Kim Jae-seung / Researcher, Hyundai Motor Securities: Delays in the construction of AI data centers reduce profitability, and over the long term, we see that concerns are growing over whether South Korean memory semiconductors will be purchased less, which could impact the stock market.]
However, if AI investment within the U.S. contracts, interest rates could fall and the dollar could weaken, which might prove positive for South Korean companies in the short term.
Conversely, if the Republican Party wins or secures enough seats to at least block the Democrats, President Trump's policies are expected to continue.
With investments in AI and other sectors continuing, favorable conditions for exports and production could be maintained.
However, burdens could emerge from stronger tariff pressure on South Korea and its companies, as well as fluctuating interest rates and exchange rates driven by increased borrowing by the U.S. government.
As opportunities and threats coexist regardless of which side wins, it is time for the government, corporations, and individual investors alike to make meticulous preparations.
(Video editing: Lee Sang-min, VJ: Jeong Han-wook)
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