New York Stock Market's 'Worst Day'... KOSPI Also Shaken

Andorrally Plummets Alongside Dow Jones by 3.12% and S&P 500 by 3.56% in One Day...

A trader at the New York Stock Exchange (NYSE) shows a shocked expression as the New York stock market index plummets on the 5th (local time). The S&P 500 index surged 124.69 points (2.99%) the day before after the Federal Open Market Committee (FOMC) of the U.S. Federal Reserve (Fed) concluded, but then plunged 153.30 points (3.56%) in one day, showing extreme volatility for two consecutive days.
[Photo by Reuters]

[Asia Economy New York=Special Correspondent Joeslgina, Reporter Hwang Yoonjoo] Major indices on the U.S. New York Stock Exchange all tumbled on the 5th (local time), marking the worst day so far this year. Just a day after Federal Reserve Chairman Jerome Powell ruled out a giant step of raising interest rates by 0.75 percentage points at once, triggering a relief rally, the gains were completely wiped out. The domestic stock market also could not avoid a simultaneous decline.

On that day, the Dow Jones Industrial Average closed at 32,997.97, down 1,063.09 points (3.12%) from the previous session. The S&P 500, which focuses on large-cap stocks, fell 153.30 points (3.56%) to 4,146.87, and the tech-heavy Nasdaq dropped 647.16 points (4.99%) to close at 12,317.69.

Economic media CNBC reported, "The declines in the Dow and Nasdaq were the largest since 2020," adding, "The daily drop in the S&P 500 was the second largest this year."

At the previous day's FOMC meeting, the Fed raised interest rates by 0.5 percentage points as expected by the market and announced it would begin reducing its balance sheet starting in June. Although Powell drew a line by saying at the press conference that a 0.75 percentage point hike was not actively being considered, easing concerns about 'high-intensity tightening,' he hinted at additional 0.5 percentage point hikes in the next two meetings, indicating that market burdens remain significant.

In the bond market, U.S. Treasury yields surged. The 10-year yield rose 0.10 percentage points from the previous day to 3.04%, the highest since 2018. During the session, it climbed to around 3.1%.

On the 27th, when the KOSPI and KOSDAQ indices plunged by over 2%, dealers were working in the dealing room of Hana Bank in Euljiro, Seoul. The U.S. stock market sharply declined due to concerns over a slowdown in the economic recession and earnings uncertainty among big tech companies, which appears to have caused a chain reaction. Photo by Moon Honam munonam@

The domestic stock market also declined in tandem. As of 10:03 a.m. on the 6th, the KOSPI was down 29.11 points (1.09%) to 2,648.11, and the KOSDAQ fell 10.29 points (1.14%) to 889.77. At the same time, foreigners sold a net 121.1 billion KRW and institutions sold a net 183.1 billion KRW on the KOSPI, fueling the index's decline. Only individual investors were net buyers, purchasing 291.4 billion KRW. Most large-cap stocks, including Samsung Electronics, remained weak, but the decline was not as steep compared to the U.S. market.

Securities firms agreed that concerns about the Bank of England (BOE) economy and low U.S. first-quarter labor productivity increased economic burdens, dampening market investment sentiment. Seo Sangyoung, head of the Media Content Division at Mirae Asset Securities, pointed out, "With interest rate hikes and concerns about economic slowdown, the possibility of stagflation is increasing. Given the challenging market environment, cash holders are reluctant to engage in net buying." However, he advised that stockholders do not need to sell due to losses. He added, "Investment sentiment could change depending on how much wage growth is reported in today's U.S. employment report and the inflation-related remarks from Federal Reserve officials."

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