New York Stock Market Falls for Fourth Day Amid Soaring Oil Prices and Interest Rates

Institutions recorded net purchases of 1.2 trillion won at the end of the trading session, supporting the market against foreign net selling of 2.6 trillion won.

However, analysis suggests that a significant portion of institutional buying is passive, so the possibility of additional selling needs to be monitored. If institutions temporarily absorbed foreign selling, institutional profit-taking might emerge in the market.

A simple rebound, where the market rises once in a single peak formation and then falls again, cannot be considered a confirmation of a bottom.

Therefore, a critical market inflection point is a period where the previous low is firmly supported, and the market attempts a trend reversal. Major stocks like SK Hynix and Samsung Electronics are still undergoing the process of confirming a bottom, and it is necessary to verify clear support.

To establish a market bottom and transition to an uptrend, forming a robust support line is essential. Investors are advised to take a conservative approach, confirming the defense of previous lows rather than being swayed by short-term rebounds.

Technically significant bottom confirmation enhances market reliability and stabilizes investor sentiment. The current market has not yet completed this bottom confirmation process.

The market is currently riddled with numerous uncertainties and negative factors such as inflation, employment instability, interest rate hikes, and upcoming elections. However, an unusual phenomenon is occurring where the stock market index remains near its all-time high despite these negative factors.

This robust market trend, which does not reflect negative factors, can actually heighten investor caution. Maintaining a high index level without sufficient resolution of negative factors harbors potential risks.

If the current negative factors are resolved, there is also a possibility that the market could explosively release its pent-up upward energy.

This reflects the central bank's judgment that the current economic situation warrants interest rate increases.

However, the report did not clearly specify the exact level to which interest rates would be raised, nor did it provide clear conditions or figures for halting rate hikes. This has left the market facing monetary policy uncertainty.

If interest rates continue to rise, there is concern that the debt burden on households and businesses will increase, and liquidity pressure across the economy will intensify. This could also negatively impact market investor sentiment.

Therefore, market attention is focused on the Bank of Korea's future monetary policy direction and the pace of interest rate increases. In the absence of specific guidelines, investors need to approach cautiously.

The fact that primary dealers' acquisition volume accounted for only 2-5% supports this.

Primary dealers acquire the remaining volume when bidders do not purchase enough government bonds. A low acquisition percentage by them means that external bidders actively bought government bonds, and the auction was successfully concluded.

As a result, the government bond auction was successful, suggesting that the upward pressure on interest rates due to war news was limited to external factors. The inherent demand in the bond market is judged to be solid.

This shows that the cause of rising interest rates is more attributable to external shocks like geopolitical risks rather than intrinsic market instability. The market is likely to stabilize once the war variable is resolved.

Foreign selling before the simultaneous closing auction was minimal, but a large volume of 2-3 trillion won emerged during the simultaneous closing auction on expiry day. On the simultaneous expiry day for futures and options, there is typically a tendency to fill previously exited supply and demand.

Despite unfavorable external variables today, the key to a market reversal on the day is whether foreign selling initially pushes down the index, then turns around during the session. This indicates that the movements of foreign investors are a crucial factor determining the short-term direction of the market.

If foreign supply and demand do not recover, a gradual decline in the index is likely to continue. Therefore, whether foreign buying turns positive during the session becomes a major observation target for market participants.

Such supply and demand flows can affect not only short-term index fluctuations but also overall market sentiment and investment strategies, requiring close analysis.

Analysis of past war cases shows that their impact on the market has never lasted longer than two months. This suggests that war risks are short-term shocks, tending to recover quickly thereafter.

The decline typically showed a V-shaped or U-shaped rebound, recovering rapidly. This is evidence that the market perceives geopolitical risks like war as short-term negative factors and is not significantly affected by long-term fundamentals.

However, even during this recovery process, a strategy is needed to prepare for additional volatility due to fluctuations in key indicators. Short-term market disruption is inevitable, but recovery can be expected in the medium to long term.

Investors need to approach the market with a long-term perspective, referencing past cases, rather than reacting to short-term panic. The market is expected to stabilize quickly once war risks are resolved.

This can be interpreted as a signal that inflationary pressures are gradually easing.

The stable maintenance of long-term inflation expectations also increases the likelihood of an interest rate freeze in September. Market inflation expectations remaining at a controllable level weakens the Fed's need for further tightening.

Therefore, a scenario is proposed where interest rates are frozen in September, followed by two additional hikes later in the year. This suggests that the Fed will cautiously manage monetary policy while closely monitoring prices and economic conditions.

While interest rate hikes reflect market conditions, oil price increases directly cause inflationary pressure.

There are 'good interest rate hikes' and 'bad interest rate hikes'. Good interest rate hikes result from increased demand accompanied by economic growth, while bad interest rate hikes stem from inflationary pressures due to supply shocks.

The current market is directly hit by rising oil prices due to supply shocks, which exacerbates inflation risks regardless of economic growth prospects, increasing market volatility.

Therefore, investors should closely monitor not only interest rate volatility but also commodity prices like oil. Oil price stability could be a crucial precondition for market recovery.

Unlike a month ago, raising interest rates now, with inflation not sufficiently contained and oil prices also high, combined with tightening, risks a double blow to the stock market.

Current interest rate hikes could excessively highlight tightening risks and place unnecessary burden on the market. With the market already hit by rising oil prices, additional rate hikes could further dampen investor sentiment.

Therefore, choosing a market-friendly monetary policy timing is crucial. There is a growing call for the Federal Reserve (Fed) to carefully decide monetary policy considering current market conditions.

Analysis suggests that considering interest rate hikes after oil instability is resolved and inflationary pressures ease would help the market achieve a soft landing.

Analysis suggests that even if the Federal Reserve (Fed) raises the benchmark interest rate two more times, it will not significantly damage the stock market. This is because the Fed's tightening intensity is not as strong as market expectations.

The fact that even two or three more rate hikes would keep the benchmark interest rate at the lower end of the monetary policy band also supports this analysis. This indicates that monetary policy maintains an accommodative stance for economic stimulation.

Conversely, bad interest rate hikes arise from inflationary pressures, negatively affecting both stock and bond markets. This can lead to concerns about stagflation, where economic slowdown and inflation occur simultaneously.

Therefore, it is crucial to understand the nature of the current interest rate increases. If interest rates rise while growth factors are not declining, it could still be a favorable phase for risk assets.

Investors must carefully analyze the background of interest rate hikes to formulate investment strategies. It is important to distinguish whether the cause is demand and growth or inflationary pressure, rather than just observing whether interest rates are raised.

Based on this technology and performance, major domestic defense companies such as LIG Nex1 and Hanwha Aerospace directly proposed technical cooperation.

In particular, through technical cooperation with LIG Nex1, they secured a rapid pilot project, proving the importance of AI drone technology in the domestic defense industry. This involved exporting the entire system, including communication networks, beyond simple drone exports.

Nearthlab's technology encompasses not only drone hardware but also AI-based autonomous flight and data analysis solutions. This integrated system export served as an opportunity to showcase the technological prowess of Korea's defense industry to the global market.

This shows that performance in the defense business directly impacted financial improvement.

Currently, Nearthlab has a high proportion of selling, general, and administrative expenses, but there are high expectations for the scale of subsequent orders. If continuous large-scale orders are received, it could offset the burden of SG&A expenses and establish a stable profit structure.

A full turnaround to profitability is expected in 2028. This suggests a long-term growth roadmap beyond short-term financial performance improvement. The plan is to achieve stable growth through continuous technology development and market expansion.

Nearthlab's financial improvement could act as a positive signal for investors and is evaluated as a case demonstrating the future growth potential of the AI drone market within the defense industry.

OpenAI's Astra model research once again proved that the more GPUs (graphics processing units) are invested, the more effectively AI model performance improves. This emphasizes the importance of hardware in AI technology development.

These results could lead to an expansion of demand not only for GPUs but also for DRAM (memory) and NAND flash (storage devices). As AI models become more complex and learning data scales increase, more computational power and storage space become essential.

Consequently, the focus of the artificial intelligence industry is shifting from software to hardware. The understanding is spreading that high-performance hardware infrastructure must be built first to enhance AI performance.

Therefore, GPU, DRAM, and NAND manufacturers are likely to emerge as major beneficiaries of AI market growth. AI technology development is expected to have a positive ripple effect across the entire hardware industry.

This means that U.S. Treasury bonds have not lost their appeal as safe-haven assets.

The consistent demand for Treasury bonds despite rising interest rates demonstrates that investors still trust U.S. Treasury bonds.

This amendment explicitly stated that DeFi (Decentralized Finance) operators would be subject to CFTC (Commodity Futures Trading Commission) oversight if they can be identified.

It also limited the scope of DeFi developer protection to spot services and required stablecoin issuance to comply with the 'Genius Act'. An exception clause for DeFi platforms' management of customer assets was added to increase regulatory clarity.

This bill is evaluated as part of efforts to ensure transparency and stability in the DeFi market. It is an attempt to lay the groundwork for the healthy growth of the DeFi industry under regulatory oversight.

In a long interview with Fox News, former President Donald Trump received critical evaluations regarding his recent actions. In the interview, Trump stated that he did not regret causing wars and that the public would be proud of him.

These remarks were criticized for showing a disconnect between his perception of the situation and reality. Former President Trump showed an attitude of not acknowledging any awkwardness regarding his actions.

This could spark controversy over political leadership and responsibility and has been criticized as a perception disconnected from public sentiment.

This was confirmed to be an attack exploiting the platform's vulnerabilities.

The hacker returned 3,400 out of the 4,000 stolen bitcoins to the platform. For the remaining 600, the hacker demanded a bug bounty and attempted negotiations with the platform.

As a result, a deal between the hacker and the Liquid platform was in progress. This hacking incident once again highlights the security vulnerabilities of cryptocurrency platforms.

This incident is expected to reignite discussions about the safety and regulatory necessity of the cryptocurrency market. In particular, concerns about the potential risks of sidechain technology are also being raised.

This is interpreted as part of Tether's strategy to expand the use cases for USDT.

Tether is attempting to extend its influence into the real economy lending market by utilizing the liquidity of its stablecoin. This is a move to expand beyond simple cryptocurrency into broader financial services.

This fund is expected to diversify blockchain-based financial products and offer new investment opportunities based on the stable value of USDT. It serves as an example of the convergence of traditional finance and cryptocurrency finance.

However, risk management and regulatory compliance for operating a large-scale loan fund are expected to be critical. Market participants are paying close attention to the success of this fund.