The New York Stock Exchange has seen declines for four consecutive trading days, driven by surging international oil prices and rising U.S. long-term Treasury yields. As geopolitical tensions in the Middle East escalate, oil prices have surpassed $100 per barrel, and the U.S. Producer Price Index (PPI) for August exceeded market expectations, raising inflation concerns. Attention is now focused on the domestic stock market's direction.
On September 10, the Dow Jones Industrial Average closed down 316.56 points (0.60%) at 50,064.10. The S&P 500 fell 44.66 points (0.58%) to finish at 7,591.70, while the tech-heavy Nasdaq dropped 171.62 points (0.65%) to close at 26,081.72.
The U.S. stock market has shown weakness amid heightened geopolitical tensions in the Middle East. Reports of Yemen's Houthi rebels seizing a port city and Iran resuming ballistic missile production in underground facilities have raised concerns about a prolonged conflict between the U.S. and Iran.
International oil prices have surged, with West Texas Intermediate (WTI) crude for October rising over 7% during trading to reach around $103 per barrel, marking the highest level since May.
Inflation indicators have also intensified pressure for rising interest rates. The U.S. PPI for August increased by 5.4% compared to the same month last year, surpassing the market forecast of 5.3%. The higher-than-expected headline PPI has raised concerns that increases in energy and transportation costs could be passed on to the Consumer Price Index (CPI), adding pressure despite expectations for a Federal Reserve interest rate cut.
Major tech stocks also faced declines, with Nvidia down 2.3%, Micron falling 4.9%, and Oracle dropping 5.4% during regular trading. However, Oracle reported quarterly revenue of $19.3 billion and a remaining performance obligation (RPO) of $66.4 billion, exceeding market expectations, and raised its annual revenue guidance to $90 billion, leading to a more than 6% increase in after-hours trading.
The domestic stock market is expected to open lower due to rising U.S. interest rates and oil prices, as well as weakness in KOSPI night futures.
As of 8:44 a.m. on September 11, shares of Samsung Electronics were down 3.1%, and SK Hynix fell 3.3%. Other major stocks, including SK Square (-3.7%) and Hyundai Motor (-1.6%), also showed weakness.
Market analysts suggest that while macro volatility may continue due to rising international oil prices and U.S. long-term interest rates, if the August CPI aligns with market expectations, the stock market may maintain some downward rigidity. Notably, the earnings strength of leading sectors such as artificial intelligence (AI) and semiconductors remains robust, and Oracle's strong performance could help restore some investor sentiment.
Han Ji-young, a researcher at Kiwoom Securities, stated, "The U.S. stock market has declined for four consecutive days due to reduced buyback sizes by the U.S. Treasury and the August headline PPI exceeding consensus, pushing the 10-year yield above 4.9%. Concerns over Saudi Arabia's reduced oil production in August and disruptions in Middle Eastern shipping have contributed to WTI prices exceeding $100, leading to this decline. Market fatigue is increasing as it is repeatedly exposed to macro uncertainties."
He added, "Today, the domestic market is expected to open lower due to the pressures of rising interest rates and oil prices, as well as caution ahead of the August U.S. CPI and the 3% decline in KOSPI night futures. However, Oracle's strong after-hours performance may help mitigate intraday losses."
He concluded, "If the August CPI meets consensus expectations, it could provide some relief to the market. Given that the earnings strength of leading sectors like AI and semiconductors remains solid, the stock market may maintain some downward rigidity amid macro volatility leading up to the September FOMC meeting."
Another analyst noted, "Although the KOSPI briefly fell below 7,000 during the day, it managed to recover and close above that level for two consecutive days. Depending on the August CPI results, short-term volatility may increase until next week, but if it does not deviate significantly from consensus, the rise in oil prices and interest rates may reverse, allowing the 7,000 level to shift from a resistance to a support level."
* This article has been translated by AI.
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