Entered2024.04.13 06:09 Modified2024.04.13 07:31
On the 12th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed trading at 37,983.24, down 475.84 points (1.24%) from the previous day.
The Standard & Poor’s (S&P) 500 index recorded 5,123.41, down 75.65 points (1.46%) from the previous day, and the Nasdaq index showed 16,175.09, down 267.10 points (1.62%) from the previous day. On this day, market participants paid attention to the news that Iran could attack Israel within 48 hours.
As investment sentiment plummeted, preference for safe assets spread throughout the market.
On this day, all three major indices fell more than 1%. The Dow index fell more than 500 points at one point during the day.
According to foreign media such as the Wall Street Journal (WSJ), Israel is said to be preparing for a direct Iranian attack on its territory within the next 24 to 48 hours.
Iran pointed to Israel as the mastermind behind the bombing of its consulate in Syria that occurred on the 1st and threatened retaliation. President Joe Biden met with reporters in Washington DC on this day and said that he expects Iran to attack Israel “sooner rather than later” and that his message to Iran is not to attack Israel. He went on to warn that Iran will not succeed.
As risk aversion emerged, the U.S. dollar and 10-year U.S. Treasury bonds strengthened in the financial markets.
The dollar index once rose to 106.110, hitting its highest level since November of last year. The dollar-yen exchange rate fell from the 153 yen range to the 152 yen range, reflecting the strength of the yen, but rebounded to the 153 yen range in the latter half of the day.
The yield on 10-year U.S. Treasury bonds fell by more than 7bp (purchase of government bonds) to the 4.51% range. Government bond yields and bond prices move in opposite directions.
Federal Reserve officials were also concerned about risks in the Middle East.
Austan Goolsbee, President of the Federal Reserve Bank of Chicago, appeared on Fox Business News and said that geopolitical risks related to the Middle East are a “wild card” for the Federal Reserve.
He said he would have to continue to monitor commodity prices while worrying about negative supply shocks due to rising oil prices.
By stock, bank stocks attracted attention as their first quarter results were announced early in the day.
Citigroup, JPMorgan Chase, and Wells Fargo’s operating revenue and earnings per share (EPS) exceeded Wall Street expectations in the first quarter, but their stock prices were sluggish as their net interest income fell short of expectations.
Citi’s stock price fell in the 1% range, and JP Morgan Chase’s stock price fell in the 6% range. Wells Fargo stock prices also fell slightly.
However, State Street stock prices rose by 2% on this day.
In particular, Coupang, a Korean e-commerce company, attracted attention by rising more than 11% on this day.
Coupang’s stock price soared after announcing a 58% increase in WoW membership prices for new members.
Tesla fell around 2%, while Amazon.com and Alphabet A fell around 1%. Metaplatforms (Facebook) fell around 2%. Nvidia also fell by 2%.
On this day, the U.S. Department of Labor announced that the import price index in March rose 0.4% compared to the previous month.
The March figure exceeded the 0.3% rise expected by experts compiled by the Wall Street Journal (WSJ).
According to the University of Michigan, the preliminary consumer sentiment index for April was 77.9, down from 79.4 the previous month.
In April, short- and long-term expected inflation rose.
The one-year expected inflation reserve rose to 3.1%, and the five-year long-term expected inflation reserve rose again to 3.0%.
Sector indices fell all at once.
Indices related to consumer discretionary goods, energy, finance, health, industry, materials, real estate, technology, and communications plunged around 1%.
According to the Chicago Mercantile Exchange (CME) FedWatch tool, the interest rate futures market forecasted a 72.8% chance that the Federal Reserve would freeze interest rates at the Federal Open Market Committee (FOMC) meeting in June, and a 26.1% chance of a 25bp cut. The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) recorded 17.31, up 2.40 points (16.10%) from the previous day.
Reporter Jo Si-hyung [email protected]
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2024-04-12 21:09:02
