Oil Tops $100, U.S. Treasury Yields Rise... Korean Stocks Expected to Open Lower [Good Morning Market]

Three Major New York Indexes Extend Losing Streak to Three Days
10-Year Treasury Yield Hits New High
Uncertainty Over Federal Reserve Policy Intensifies

The three major indexes on the New York Stock Exchange fell for a third consecutive day as international oil prices surpassed 100 dollars per barrel and U.S. Treasury yields soared. The domestic stock market is also expected to start lower.

Dealers are working in the dealing room at the Seoul Hana Bank headquarters. Photo by Yonhap News

On September 9 (local time), the Dow Jones Industrial Average closed at 52,380.66, down 405.41 points (0.77%) from the previous day. The S&P 500 Index dropped 37.16 points (0.48%) to 7,636.36, while the tech-heavy Nasdaq Composite Index fell 168.07 points (0.64%) to finish at 26,253.34.

After the United States Central Command (CENTCOM) destroyed five Iranian oil tankers in response to an attack on a U.S. military vessel, Iran claimed to have retaliated by launching ballistic missiles at a U.S. base in Jordan. Anxiety over prolonged supply disruptions due to military clashes between the U.S. and Iran has pushed oil prices sharply higher.

At the London ICE Futures Exchange, November delivery Brent crude closed at 101.21 dollars per barrel, up 3.29 dollars (3.36%) from the previous session. This marked the highest closing price since May 22 and the first time it surpassed 100 dollars since July 23. October delivery West Texas Intermediate (WTI) also ended up 3.02 dollars (3.25%) at 96.05 dollars.

The sharp rise in oil prices and inflationary pressures stemming from energy costs have fueled expectations for a rate hike by the U.S. Federal Reserve, dampening investor sentiment. As a result, market attention is now focused on the U.S. Producer Price Index (PPI) and Consumer Price Index (CPI) data to be released later this week. If inflation remains strong, it will boost arguments for a rate hike in September, while signs of easing would strengthen the case for holding rates steady.

The increase in Treasury yields also contributed to the decline in stock prices. The U.S. Treasury announced an early buyback of long-term bonds worth up to 6 billion dollars on the 10th, but the amount fell short of market expectations (8 to 10 billion dollars). Consequently, the yield on the 10-year U.S. Treasury bond climbed above 4.85% during intraday trade, reaching its highest level since November 2023.

The dollar index, which measures the value of the dollar against six major currencies, showed a slight downward movement near 98.8. In contrast, the price of international gold—considered a safe haven asset—rose, with December gold futures on the New York Mercantile Exchange closing up 0.5% at 4,458.80 dollars per ounce.

Han Jiyoung, a researcher at Kiwoom Securities, said, "If the pressures from oil prices and interest rates persist, it could weaken the resilience of the stock market, so caution regarding near-term volatility ahead of the August CPI announcement is warranted." Han added, "While the domestic stock market may give back some of the previous day's gains due to the simultaneous expiration of futures and options contracts as well as ongoing macro headwinds, this should not be seen as a break in the overall trend." She continued, "Attention should be paid to the broadening upward momentum across the entire artificial intelligence (AI) infrastructure value chain—including not only semiconductors but also power equipment, nuclear power, multilayer ceramic capacitors (MLCC), and related sectors—as the market continues to build higher lows."

This content was produced with the assistance of AI translation services.