[Good Morning Stock Market] US Stocks Fall Amid Diminished Rate Cut Hopes... "KOSPI Starts Down 0.5%"

Christopher Waller, FED Board Member, Draws Line on 'Early Rate Cuts'
US Stocks Fall Across the Board as Rate Cut Expectations Diminish
KOSPI Expected to Start Lower Amid North Korea Risks

On the 17th, the domestic stock market is expected to start lower. The decline in the U.S. stock market due to diminished expectations of interest rate cuts and the North Korean risk are likely to add downward pressure.

[Image source=AFP Yonhap News]

On the 16th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 37,361.12, down 231.86 points (0.62%) from the previous session. The S&P 500 fell 17.85 points (0.37%) to 4,765.98, and the Nasdaq dropped 28.41 points (0.19%) to 14,944.35.

Christopher Waller, a Federal Reserve (Fed) Board member, dampened market sentiment that day. At an event hosted by the Brookings Institution, he said, "Interest rate cuts have often been swift and substantial, but this cycle does not warrant moving quickly or cutting rates rapidly as in the past." He drew a line under the market's expectations for an 'early rate cut.' Following Waller's remarks, the U.S. 10-year Treasury yield surpassed 4%, and the dollar index, which measures the dollar's value against six major currencies, rose 0.93% to 103.1 compared to the previous session.

Additionally, profit-taking surged in the stock market. All sectors except IT declined. Apple, which announced an unusual discount sale in China, closed down 1.2% at $183.63. In contrast, Microsoft, which launched the personal AI service 'Copilot Pro,' closed up 0.46% at $390.27. Market cap leader Microsoft ($2.9 trillion) further widened the gap with second-ranked Apple ($2.839 trillion). Nvidia rose 3.06%, hitting another record high, and AMD also rose 8.31% alongside it.

The previous day, the domestic stock market fell below the 2,500 mark for the first time in a month after North Korean Supreme Leader Kim Jong-un’s hardline remarks that "South Korea is the main enemy." Kim Seok-hwan, a researcher at Mirae Asset Securities, said, "Considering recent exchange rate trends, North Korean risk appears to be increasing downward pressure on the stock market. While the 'North Korea' factor has often acted as a constant rather than a variable in the domestic market, recent global geopolitical uncertainties have expanded, making it a 'variable' again." He added, "From an investment perspective, risk management should take priority over increasing exposure for now," and predicted, "The KOSPI is expected to start down more than 0.5% on the 17th."