Interest Rate Hike Probability Decreasing? Conditions for a September Stock Market Rebound | Han Sang-hee, Hanwha Investment & Securities Senior Research Fellow

Summary

Han Sang-hee expects US and Korean equities to stay firm into the September FOMC, supported by earnings focus and declining rate-hike odds. He remains long-term constructive on semiconductor/AI leadership but warns that after the FOMC September-October may bring a US equity correction similar to 1986. He also flags the September 9 Treasury buyback expansion as a key event for long-term yields.

• Han sees room for the Nasdaq and S&P 500 to rally into the September FOMC, with the Nasdaq still below its June high.
• Korea may post a second three-day bullish candle sequence and hold a higher low, supporting short-term sentiment.
• Bond and stock investors are split: bond investors see sticky inflation while stock investors see acceptable inflation supporting earnings.
• The September 9 doubling of Treasury buybacks is seen as potentially capping long-term yields and lowering rate-hike expectations.
• Post-FOMC, Han warns of a sell-on reaction and compares September-October to 1986, with Trump weak and the Fed unlikely to expand asset purchases.
• Semiconductor/AI hardware leadership is still intact long-term even though the Astra catalyst is questioned.
• Anthropic's IPO delay is not viewed as a serious negative signal.
• CPI risk is mainly in energy base effects; core CPI is expected to remain tame.