Overnight, U.S. stocks fell sharply as international oil prices and U.S. Treasury yields rose. Concerns over oil supply disruptions from Saudi Arabia have led to a surge in prices, increasing inflation fears and worries about further tightening from the Federal Reserve. On September 16, the domestic market is expected to remain cautious ahead of the Federal Open Market Committee (FOMC) meeting.
On the New York Stock Exchange, the Dow Jones Industrial Average closed down 328.09 points (0.63%) at 50,293.11. The S&P 500 index fell 34.25 points (0.45%) to finish at 7,585.73, while the tech-heavy Nasdaq dropped 204.84 points (0.78%) to close at 25,981.57.
The surge in international oil prices has put pressure on the stock market. On the New York Mercantile Exchange, October West Texas Intermediate (WTI) crude futures settled at $105.83 per barrel, up 4.38% from the previous day. Brent crude for November delivery on the ICE Futures Exchange rose 2.90% to $108.75 per barrel. Both benchmarks reached their highest closing prices since May 19.
Concerns over oil supply disruptions from Saudi Arabia have driven prices higher. Reports indicated that loading operations at the Yanbu oil export terminal on the Red Sea have been halted, and some oil production in Libya has also been suspended, raising fears of supply shortages. The rise in oil prices is increasing inflationary pressures and prompting expectations of interest rate hikes from the Fed, which has also led to an increase in U.S. Treasury yields.
The yield on the 10-year Treasury note reached as high as 5.041% during trading, marking its highest level since July 2007, before settling around 5.00%. The 30-year yield also climbed to 5.401%, the highest since June 2007, before trading at approximately 5.37%. The rising yields have increased concerns about the relative overvaluation of stocks.
The domestic market is expected to be influenced by the rising U.S. long-term interest rates and oil prices, despite perceptions of excessive declines due to recent adjustments.
Foreign investors have shifted to net selling in the KOSPI since September 10, with cumulative net sales reaching 9 trillion won from September 1 to 15. However, analysts suggest that the current downward pressure on stock prices is largely due to uncertainties surrounding the September FOMC and noise related to reduced investments in artificial intelligence (AI), indicating that it may be premature to conclude that this weakness will lead to a long-term decline.
In the NXT premarket as of 8:34 a.m., Samsung Electronics was down 0.20% from the previous trading day. SK Hynix fell 0.06%, LG Energy Solution decreased by 0.82%, Samsung Biologics dropped 0.14%, and Samsung C&T was down 0.58%. Conversely, Samsung Electro-Mechanics rose 0.08%, Hyundai Motor increased by 0.27%, KB Financial gained 0.57%, and Samsung Life Insurance was up 0.53%.
Han Ji-young, a researcher at Kiwoom Securities, stated, "The September rate hike is already known, so the focus now shifts to whether there will be additional hikes in October or December FOMC meetings. The recent strengthening of expectations for further tightening is rooted in energy inflation concerns, suggesting that future developments in the Middle East and oil prices will add variability to the interest rate trajectory."
He added, "Unless there is a shock indicating a strong commitment to tightening, such as an upward adjustment in the dot plot at the September FOMC, additional pressure from the Fed for further adjustments is likely to be limited. If concerns about further tightening and rising long-term interest rates ease after the September FOMC, the domestic market may have a chance to return to its previous recovery path."
* This article has been translated by AI.
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