[Good Morning Stock Market] Middle East Tensions Peak... KOSPI Expected to Show Limited Movement

US 3 Major Indexes All Close Lower
International Oil Prices Also Surge Over 5%

Geopolitical risks originating from the Iran-Israel military conflict have come to the forefront, leading to expectations that the KOSPI will show a limited movement on the 4th. However, Jensen Huang, CEO of NVIDIA, stated that there is "crazy demand" from customers for the new Blackwell chips, which is expected to have a positive impact on semiconductor stocks.

On October 2nd, the first trading day of the month, the KOSPI started at 2,566 points, down 1%. The KOSDAQ also fell slightly, and the won-dollar exchange rate rose. Employees are working in the dealing room at the Hana Bank headquarters in Euljiro, Seoul, while various indices are displayed on the electronic board. Photo by Heo Younghan younghan@

All three major indices on the U.S. New York Stock Exchange closed lower on the 3rd (local time). As tensions in the Middle East peaked due to the clash between Israel and Iran, international oil prices surged more than 5% in a single day.

On that day in the New York stock market, the blue-chip-focused Dow Jones Industrial Average closed at 42,011.59, down 184.93 points (0.44%) from the previous trading day. The large-cap-focused S&P 500 index fell 9.6 points (0.17%) to 5,699.94, and the tech-heavy Nasdaq index dropped 6.65 points (0.04%) to 17,918.48. Notably, NVIDIA rose 3.4% after CEO Jensen Huang expressed confidence in demand for the new Blackwell chips.

Concerns over a full-scale war between Israel and Iran have plunged the Middle East situation into uncertainty, causing international oil prices to surge over 5%. West Texas Intermediate (WTI) crude oil jumped $3.61 (5.15%) to close at $73.71 per barrel, while Brent crude, the global oil price benchmark, rose $3.72 (5.03%) to $75.64 per barrel.

This is interpreted as a result of U.S. President Joe Biden’s remarks that Israel, having suffered a large-scale missile attack from Iran, is considering retaliatory measures including attacks on Iranian oil facilities. Additionally, simultaneous strikes by port workers in the southeastern region have weakened investor sentiment.

Hwang Sanhae, a researcher at LS Securities, said, "Except for energy and semiconductors, most sectors closed lower amid rising oil prices triggered by Biden’s mention of Israeli-Iranian oil facility attacks and rising bond yields due to strong service sector indicators." He added, "Although there is caution ahead of tomorrow’s scheduled employment report, the impact is expected to be limited due to the sharp rise in the Institute for Supply Management (ISM) September Services Purchasing Managers’ Index (PMI)."

The domestic stock market is expected to show limited movement while closely monitoring the U.S. September employment report, which will be released that night in Korean time, and the Middle East situation.

Kim Ji-won, a researcher at KB Securities, said, "With ongoing Middle East geopolitical risks, soaring oil prices, and concerns about uncertainty and inflation stimulation, selling pressure is inevitable." However, she noted, "Jensen Huang’s statement about customers’ ‘crazy demand’ for Blackwell is positive for semiconductor stocks, and a differentiated trend is expected reflecting both Middle East concerns and semiconductor stock optimism."