New York Stock Market Falls Across the Board Awaiting FOMC... Tesla Plummets 6%

Profit-Taking Emerges After Two Days of Gains
Focus on FOMC Rate Decision and Dot Plot on the 19th
U.S.-Russia Leaders' Call and Jensen Huang's Speech Scheduled Today

The three major indices of the U.S. New York stock market were in a downward trend in the early trading hours on the 18th (local time). Investors who took profits after the stock market rose for two consecutive days are awaiting the phone call between the U.S. and Russian leaders, as well as the Federal Reserve's (Fed) interest rate decision and dot plot release scheduled for the following day.

AFP Yonhap News

As of 10:08 a.m. in the New York stock market on the day, the Dow Jones Industrial Average (Dow) focused on blue-chip stocks was down 199.17 points (0.48%) from the previous trading day, standing at 41,642.45. The S&P 500, centered on large-cap stocks, fell 57.65 points (1.01%) to 5,617.47, and the Nasdaq, focused on tech stocks, plunged 302.89 points (1.7%) to 17,505.77.

By individual stocks, U.S. electric vehicle maker Tesla dropped sharply by 5.98% after RBC Capital Markets lowered its target price. Nvidia, the leader in artificial intelligence (AI), was down 3.39% ahead of CEO Jensen Huang’s keynote speech. Alphabet, Google's parent company, declined 3.49% after agreeing to acquire cybersecurity firm Wiz for $32 billion (approximately 46.5 trillion KRW).

The market is focusing on the two-day FOMC regular meeting starting today. According to the Chicago Mercantile Exchange (CME) FedWatch, Wall Street expects with a 99% probability that the Fed will keep the benchmark interest rate steady at 4.25-4.5% on the 19th. The key focus is on the Fed’s dot plot, which contains interest rate projections. Previously, in December last year, the Fed significantly reduced its forecast for the number of rate cuts in 2025 from four times (total 1.0 percentage point) to two times (total 0.5 percentage point), each by 0.25 percentage points. The question is whether the Fed will emphasize inflation concerns and take a hawkish stance by reducing the rate cut forecast to once this year, or focus on recession concerns and take a dovish stance by increasing it to three times. Experts expect the Fed to maintain the forecast of two rate cuts this year as before.

Investors are also awaiting CEO Huang’s speech scheduled at Nvidia’s developer event, 'GTC 2025.'

Attention is also on the scheduled meeting between U.S. President Donald Trump and Russian President Vladimir Putin. The two leaders plan to discuss ending the Ukraine war, and if progress is made in the talks, it could ease geopolitical uncertainties and improve investor sentiment.

Amid ongoing tariff uncertainties triggered by Trump, U.S. Treasury Secretary Janet Yellen reaffirmed plans for reciprocal tariffs on April 2. In an interview with Fox News, she said, "On April 2, countries will receive numbers representing tariffs," adding, "Some countries will have very low tariffs, and some will have very high tariffs." Regarding concerns about a recession caused by tariff shocks, she said, "The indicators are very good, so there is no reason to experience a recession," but also noted, "Nothing can be guaranteed."

Jay Woods, Chief Global Strategist at Freedom Capital Markets, analyzed, "The tariffs that the Trump administration seeks to implement and the ongoing trade tensions have brought considerable uncertainty. Investors want to know how these policies will affect the Fed’s economic outlook, especially inflation and growth projections."

Government bond yields remained steady. The 10-year U.S. Treasury yield, a global bond yield benchmark, stayed at 4.3%, the same as the previous trading day, while the 2-year U.S. Treasury yield, sensitive to monetary policy, moved slightly down by 1 basis point (1 bp = 0.01 percentage point) to around 4.03% compared to the previous day.