This month, the domestic stock market will face a series of large variables such as U.S. employment,..

This month, the domestic stock market will face a series of large variables such as U.S. employment, prices, and the Federal Open Market Committee (FOMC). In addition, September-October is a time when stock market volatility grows seasonally, which complicates investors’ calculation methods.

According to the financial investment industry on the 3rd, the first watershed for the domestic stock market this month is the U.S. employment report for August, which will be released on the 4th (local time).

Stock market watchers say that the market is more likely to react more sensitively to “strong employment” than to “worsening employment.” This is because if employment is stronger than expected at a time when the Fed’s alertness to additional interest rate hikes has increased since the Jackson Hole meeting, the cause for austerity could be even greater.

Ryu Jin-yi, a researcher at KB Securities, said, “The market reaction is expected to be relatively sensitive to the expansion of the possibility of tightening when a surprise is recorded rather than an employment indicator shock asymmetrically.”

On the contrary, some analysts say that if employment slows down gradually, the stock market will rather breathe. Recently, the U.S. economy has seen growth and employment growth slow at the same time, as long as the cooling of employment is not enough to spread to recession concerns, it can be seen as a material to lower the burden of additional interest rate hikes.

Citing the recent slowdown in U.S. growth and falling prices, Moon Nam-joong, a researcher at Daishin Securities, predicted, “If August employment indicators lead to concerns about cooling the job market following July, investors will increase hedging movements in preparation for a rate cut.”

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Prices are waiting as soon as you hand over your employment. Producer price index (PPI) will be released on the 10th and consumer price index (CPI) on the 11th. In particular, CPI is considered the de facto last variable in interest rate decisions as it comes out just before FOMC.

Recently, as international oil prices have risen again, there is a growing sense of caution about prices. With oil prices rebounding to the mid-$80 per barrel (about 108,840 won) since July, there is also a possibility that the CPI will rise more than 0.3% last month from the previous month. If prices are stronger than expected, it is difficult to rule out the possibility that the Fed will raise interest rates despite a slowdown in employment.

Yoon Yeo-sam, a researcher at Meritz Securities, said, “The oil price, which has rebounded to the mid-$80 level since July, continues to stimulate the inflation burden even if it is a supply shock,” adding, “The CPI in August is expected to rebound more than 0.3% from the previous month.”

“Simply put, a federal rate hike could take place at the FOMC in September,” he added.

“The KOSPI in September is in the box…It’s not time to overdo your bets.”

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As such big events are concentrated, it is predicted that the domestic stock market is likely to fluctuate in the box area this month rather than setting a clear direction.

Seasonally, September-October is perceived as a difficult time for the stock market. Looking at the average from 2005 to 2025, the S&P 500 index was relatively weak from mid-September to mid-October, and the KOSPI has been weak since October. Since the September-October adjustment, there has been a pattern of year-end rallies since November, mainly in the U.S. stock market.

Adjusting institutional investors’ positions and increasing U.S. bond supply are also burdensome. Normally, as U.S. bond supply increases from September, long-term interest rates rise, the liquidity environment shrinks, and demand for rebalancing at the end of the quarter can overlap. This is why the volatility index (VIX) and long-term interest rates show a seasonality that rises from September to October.

Hwang Soo-wook, a researcher at Meritz Securities, said, “The stock market in September considers the box sector as a baseline scenario,” adding, “The basic stance is to respond conservatively rather than excessively pursuing risks.”