[New York Close] Decline Amid US-Iran War Threat... Oil Prices Surge 3.1%

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[Asia Economy New York=Special Correspondent Kim Bong-su] The U.S. New York stock market fell on the 3rd (local time) due to heightened geopolitical tensions in the Middle East following the U.S. military's killing of a key Iranian military figure, increased uncertainty in the U.S. manufacturing sector, and related concerns.

On that day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 28,634.88, down 233.92 points (0.81%) from the previous trading day. This marked the largest single-day drop since early last month. The S&P 500 index also fell 23.00 points (0.71%) to close at 3,234.85, and the Nasdaq index ended the day down 71.42 points (0.79%) at 9,020.77.

International oil prices fluctuated significantly. This was due to Iran warning of retaliation after the U.S. killed Qassem Soleimani, a key Iranian military commander of the Quds Force (an elite unit of the Islamic Revolutionary Guard Corps), in an airstrike in Baghdad, Iraq. On the New York Mercantile Exchange (NYMEX), West Texas Intermediate (WTI) crude oil for February delivery closed at $63.05 per barrel, up 3.1% ($1.87) from the previous day. This is the highest level in about eight months since May last year. Brent crude for March delivery on the London ICE Futures Exchange was trading at $68.70 per barrel as of 3:34 p.m., up 3.70% ($2.45).

International gold prices, considered a safe haven asset, also rose sharply, reaching the highest level in about four months. On the New York Commodity Exchange, February delivery gold rose 1.6% ($24.30) from the previous day to $1,552.40 per ounce.

Airline stocks, sensitive to oil prices, also fell significantly. Shares of United Airlines, American Airlines, and Delta Air Lines all dropped more than 1.6% that day.

On the other hand, energy stocks rose sharply on expectations of price increases. Shares of Concho Resources and Apache rose 3.7% and 1.3%, respectively, while Devon Energy's stock also increased by 1.2%.

Manufacturing sector indicators, which were weaker than expected, also weighed on stock prices that day. The Institute for Supply Management (ISM) announced that the December Manufacturing Purchasing Managers' Index (PMI) was 47.2, the lowest in the past 10 years. This was even lower than the Dow Jones experts' forecast of 49.

As preference for safe assets increased, U.S. Treasury prices also rose. The yield on the 10-year Treasury note traded lower at around 1.79% compared to the previous day.

On Wall Street, there is growing concern that if the conflict between Iran and the U.S. escalates, a sharp rise in international oil prices could trigger a recession, leading investors to flock to safe assets.

Until the day before, the New York stock market had recorded strong performance amid a continued upward trend since last year. The Dow index rose more than 300 points the previous day, while the S&P 500 and Nasdaq indices increased by 0.8% and 1.3%, respectively.

U.S. CNBC pointed out, "Although the New York stock market continued strong growth last year, optimism is fading this year due to political tensions such as North Korea nuclear negotiations, the impeachment of President Donald Trump, and conflicts with Iran."

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