The New York stock market has declined for three consecutive days due to uncertainties in the Middle East and a surge in long-term government bond yields. With semiconductor stocks also facing profit-taking pressures, the domestic market is expected to open lower on the 19th. However, as the recent rise in interest rates has largely been reflected in the previous day's U.S. market, attention is on whether there will be a reduction in intraday losses.
On the 18th (local time), the Dow Jones Industrial Average closed down 116.38 points (0.22%) at 53,343.40. The S&P 500 index fell 53.30 points (0.69%) to finish at 7,691.76, while the tech-heavy Nasdaq composite dropped 355.20 points (1.33%) to close at 26,289.71.
As negotiations between the U.S. and Iran remain uncertain, rising international oil prices have reignited inflation concerns. President Donald Trump stated that there are no ongoing or scheduled negotiations with Iran, while Iranian officials warned that they would not reopen the Strait of Hormuz until the U.S. fulfills its commitments.
Bond yields have also pressured the stock market. The yield on the U.S. 10-year Treasury note reached around 4.70%, while the 30-year yield climbed to 5.33%, marking the highest levels since 2007. The increase in long-term yields has been driven by rising fiscal deficits in major countries and an uptick in corporate bond issuance due to big tech's investments in artificial intelligence.
Semiconductor stocks faced significant profit-taking, with the Philadelphia Semiconductor Index dropping 4.98%. Major semiconductor companies, including Micron (-7.06%), SanDisk (-8.89%), and Western Digital (-7.43%), all saw sharp declines. SK Hynix's American Depositary Receipts (ADRs) fell by 9.20%.
The domestic market is also expected to open lower due to the weakness in U.S. semiconductor stocks and rising interest rates.
In the pre-market on the 19th, as of 8:23 a.m., Samsung Electronics was down 4.8%, and SK Hynix was down 5.7%. Other major semiconductor and tech stocks, including SK Square (-6.6%) and Samsung Electro-Mechanics (-4.8%), also showed weakness.
Market analysts believe that while the rise in long-term rates and the adjustment in semiconductor stocks may increase short-term volatility, the likelihood of a repeat of the abnormal supply-demand deterioration seen during the sharp drop in July is low. They note that the valuation burden on the KOSPI has significantly decreased, suggesting that additional downward pressure from rising rates will be limited.
Han Ji-young, a researcher at Kiwoom Securities, stated, "The domestic market is expected to open lower due to the rise in long-term rates in major countries, the weakness in U.S. semiconductor stocks, and the sharp drop in KOSPI 200 night futures. However, the pressure from rising rates has largely been reflected in the previous day's sharp decline, so we may see a recovery in intraday losses."
She added, "The proportion of single-stock leveraged trading has decreased from over 30% in July to below 5% currently, and the VKOSPI has dropped from the 80-90 point range to around 50 points, indicating that the absolute level of volatility is lower than before. With the KOSPI's forward P/E ratio around 5.6, the valuation burden is not significant, making it more appropriate to prepare for increased short-term volatility due to rising rates rather than expecting further crashes."
* This article has been translated by AI.
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