Nasdaq Falls 1.5% on Soaring Oil Prices, Surging Bond Yields

The Nasdaq Composite Index, a key representative index of the New York stock market, dropped 1.54% as a combination of rising international oil prices and soaring U.S. Treasury yields hit the market. On the 15th (local time), the Nasdaq index closed at 26,225.15 on the New York Stock Exchange, while the S&P 500 index fell 1.24% and the Dow Jones Industrial Average lost over 500 points.

This development put the brakes on the strong performance of artificial intelligence (AI) and semiconductor-related stocks that had continued for over a month. Technology stocks like NVIDIA, popular among domestic investors, and leveraged Exchange Traded Funds (ETFs) also declined, heightening concerns about losses. Notably, SOXL plunged 11.82%, and the sharp declines were attributed to concentrated profit-taking in stocks that had recently surged following the AI theme.

A surge in U.S. Treasury yields was identified as the core variable causing market anxiety. The U.S. 10-year Treasury yield reached 4.60% intraday, and the 30-year yield hit 5.12%. Concerns about inflation driven by high oil prices began to reflect the possibility of further tightening by the Federal Reserve. Oil prices also climbed, with Brent crude surpassing $109 a barrel and WTI exceeding $105, exacerbating inflation worries. This was analyzed as being influenced by heightened geopolitical risks in the Middle East and tensions surrounding the Strait of Hormuz.

The decline in the New York stock market this time is interpreted as a result of the collision between the AI rally and the interest rate shock. The market is beginning to test whether it can continue to rise solely on AI expectations. While some analyses suggest that buying sentiment for AI semiconductors could reignite if NVIDIA's earnings come in stronger than expected, concerns remain that increased interest rate burdens could further pressure growth stocks.

Despite the day's downturn, domestic investors bought the most NVIDIA shares. As of the 14th, NVIDIA's holding value increase reached 1.2027 trillion won, with strong buying interest also seen in Apple, Invesco QQQ, Micron, and SOXL. The total holding value in U.S. stocks increased to 299.9698 trillion won, reaching a record high, indicating that funds have been steadily flowing into the U.S. stock market even during the recent market adjustment phase.