[Good Morning Stock Market] New York Stock Market Plummets Amid Recession Concerns... Domestic Market Also Expected to Decline

Concerns about a potential recession in the U.S. economy spread, causing the three major New York stock indices to plunge simultaneously on the 10th (local time). The domestic stock market is expected to start lower due to negative factors originating from the U.S.

At the New York Stock Exchange that day, the Dow Jones Industrial Average closed at 41,912.35, down 890.01 points (-2.08%) from the previous trading day. The large-cap focused Standard & Poor's (S&P) 500 index ended at 5,614.56, down 155.63 points (-2.69%) from the previous session.

The tech-heavy Nasdaq index closed at 17,468.33, plunging 727.90 points (-4.00%) from the previous session. The Nasdaq experienced its largest single-day drop since September 2022.

EPA Yonhap News

The decline was led by the simultaneous plunge of the seven major U.S. tech companies known as the "Magnificent 7 (M7)." Tesla fell sharply by 15.43%, while Apple (-4.85%), Nvidia (-5.07%), Meta (-4.42%), Microsoft (-3.34%), and Alphabet (-4.49%) also saw significant losses. The combined market capitalization of these companies decreased by $774 billion (1,129 trillion KRW).

The Chicago Board Options Exchange (CBOE) Volatility Index (VIX), often called the "fear index," rose 4.49 points to 27.86 compared to the previous trading day. During the session, the VIX surged to 29.56, marking the highest level in seven months since August last year, when recession fears arose due to employment shocks.

President Donald Trump's remarks that he would push forward with his policies, including tariffs, even at the cost of a temporary recession, significantly dampened investor sentiment. In an interview aired on Fox News the previous day, Trump said about his economic policies, "It takes a little time," and did not rule out the possibility of a recession this year.

The domestic stock market is also expected to open lower on the 11th, influenced by the U.S. market.

However, the securities industry notes that Trump's recession-related comments were partially reflected during the previous day’s domestic trading session, and that the sharp drop in the U.S. market the day before was largely a panic sell-off.

Han Ji-young, a researcher at Kiwoom Securities, explained, "Merck (1.9%) and Moderna (1.5%) performed relatively well in the U.S. market," adding, "A rotation trading session is expected to unfold during the day, driven by individual factors such as benefits from falling interest rates and the defensive nature of biotech stocks."