[Good Morning Market] New York Stocks Plunge on Possible U.S. Involvement in Middle East Conflict... Korea Also Affected

The three major indexes on the New York Stock Exchange all fell simultaneously. As former U.S. President Donald Trump discussed potential military intervention in Iran, risk aversion sentiment emerged. On June 18, the domestic stock market is also expected to show a stagnant trend, amid concerns over renewed instability in the Middle East.

Reuters Yonhap News

On June 17 (local time), the Dow Jones Industrial Average closed at 42,215.8, down 299.29 points (0.7%) from the previous trading day. The large-cap S&P 500 index dropped 50.39 points (0.84%) to 5,958.72, while the Nasdaq index fell 180.12 points (0.91%) to 19,521.09.

International oil prices also surged. At the ICE Futures Exchange, the front-month Brent crude futures closed at $76.54 per barrel, up $3.22 (4.4%) from the previous session. Similarly, at the New York Mercantile Exchange, the front-month West Texas Intermediate (WTI) crude futures settled at $74.84 per barrel, an increase of $3.07 (4.28%) from the previous trading day.

President Trump held a National Security Council (NSC) meeting at the White House, discussing with his key aides for over an hour ways to directly target Iran. He also emphasized on his own social networking service, Truth Social, that "We know exactly where the so-called 'Supreme Leader' is hiding," and added, "Our patience has reached its limit, and Iran must surrender unconditionally."

Han Ji-young, a researcher at Kiwoom Securities, explained, "The U.S. stock market started lower due to weak retail sales in May and a wait-and-see sentiment ahead of the June Federal Open Market Committee (FOMC) meeting." She added, "During the session, concerns grew about possible U.S. military strikes on Iranian nuclear facilities and the potential for U.S. military intervention in the Israel-Iran conflict, which led to a lower close."

The domestic stock market is also expected to show a sluggish trend due to instability stemming from the Middle East. Han further stated, "The market is likely to start lower due to renewed concerns over instability in the Middle East and a wait-and-see sentiment ahead of the June FOMC meeting." She added, "Throughout the session, the market is expected to remain stagnant overall, with attention focused on news flow related to possible U.S. military responses, and a shift toward sector- and stock-specific movements is anticipated."

Kim Ji-won, a researcher at KB Securities, also explained, "In the domestic market, short-term fatigue from rapid gains is likely to lead to profit-taking," and added, "It is important to be aware of the possibility of increased volatility due to new developments from the Middle East."