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  • U.S. Stocks Plunge Despite Feds Rate Hold; Dow Falls 2.19%
    U.S. Stocks Plunge Despite Fed's Rate Hold; Dow Falls 2.19% U.S. stock indices fell sharply on July 29, 2026, as the Federal Reserve held interest rates steady, but concerns about potential rate hikes lingered due to dissent among some committee members. Investor sentiment was further dampened by rising oil prices and long-term Treasury yields amid escalating tensions in the Middle East.The Dow Jones Industrial Average closed down 2.19% at 51,594.14. The S&P 500 dropped 1.52% to 7,316.15, while the tech-heavy Nasdaq Composite fell 1.74% to 24,442.94.The S&P 500 index reached its lowest level in a month. The Nasdaq Composite is now approximately 9% below its all-time high recorded in June, and the Nasdaq 100 index also fell 2.1%, widening its decline to 11% from the June peak.Fed Holds Rates Steady; Three Members Advocate for HikeThe Federal Open Market Committee (FOMC) decided to maintain the benchmark interest rate at 3.50% to 3.75%. While this decision aligned with market expectations, three of the 12 voting members expressed dissent, advocating for a 0.25 percentage point increase, citing ongoing inflationary pressures.Fed Chair Kevin Warsh reiterated concerns about inflation during a press conference. Consequently, the futures market reflects a roughly 60% probability that the Fed will raise rates in September.In the bond market, long-term yields rose, with the yield on the 10-year U.S. Treasury note increasing by about 7.5 basis points to 4.679%. In contrast, the yield on the more sensitive two-year note fell by approximately 3.5 basis points to 4.242%. Concerns that rising oil prices could reignite inflation were reflected in the long-term yields.Tech Stocks Weaken Amid AI Investment ConcernsInvestor sentiment surrounding technology stocks deteriorated as major tech companies invest heavily in AI infrastructure. There are growing concerns about whether these investments will translate into actual revenue and profit growth.Notably, SK Hynix reported a nearly sixfold increase in second-quarter operating profit compared to the previous year, but it fell short of heightened market expectations, leading to a nearly 10% drop in the South Korean stock market, which also impacted U.S. AI-related stocks. Vertiv, a provider of power and cooling infrastructure for AI data centers, saw its quarterly revenue fall short of market forecasts, resulting in a 17% decline.Among the 11 sectors in the S&P 500, eight experienced declines. The industrial sector fell 3.24%, the largest drop, while the information technology sector decreased by 2.5%.In individual stocks, Lennox, a heating and cooling company, plummeted 21% after lowering its annual earnings forecast. Conversely, Ford raised its annual profit outlook, resulting in a 2.1% increase, while Visa rose 0.6% after exceeding quarterly earnings expectations.Middle East Tensions Escalate; WTI Oil Prices Surge 6.6%International oil prices surged significantly due to renewed military clashes, including U.S. and Saudi airstrikes against pro-Iranian forces in Iraq and Iranian attacks on U.S. military bases in the region, raising concerns about potential disruptions in oil supply.On this day, Brent crude rose by $6.65 (7.91%) to close at $90.74 per barrel. West Texas Intermediate (WTI) crude increased by $5.20 (6.56%) to $84.46 per barrel.The significant drop in U.S. oil inventories also contributed to rising prices, with last week's figures showing a decrease of 7.2 million barrels, marking the lowest level since 2018.* This article has been translated by AI. 2026-07-30 07:08:00
  • Black Wednesday Hits Markets Despite SK Hynix Record Earnings
    Black Wednesday Hits Markets Despite SK Hynix Record Earnings Black Wednesday Hits Markets Despite SK Hynix Record Earnings On July 29, the Korea Exchange reported that the KOSPI closed at 5,663.24, down 360.42 points (5.98%) from the previous trading day. The KOSDAQ started at 713.71, up 7.86 points (1.11%), but quickly turned downward, finishing at 662.68. The sharp decline triggered the 15th first-stage circuit breaker in history and the ninth this year for the KOSPI. The KOSDAQ also activated its 14th first-stage circuit breaker, marking the first time both markets experienced simultaneous circuit breaker activations for two consecutive days. Earlier that day, SK Hynix reported its second-quarter consolidated revenue at 79.3187 trillion won and operating profit at 60.5426 trillion won. Despite these record earnings, the figures fell slightly short of market expectations, failing to revive investor sentiment. SK Hynix's stock plummeted by 9.61%, while Samsung Electronics dropped 5.23%, leading to a widespread sell-off in major semiconductor stocks. Han Ji-young, a researcher at Kiwoom Securities, analyzed, "The panic selling that spread across the market was driven by a loss of confidence after the previous day's sharp decline, leading investors to lock in losses." Market Analysis According to Yuanta Securities, the recent drop was not due to systemic risks akin to the Lehman crisis or a sudden economic collapse, but rather a result of overwhelming investor sentiment and supply-demand dynamics. Existing concerns, such as China's development of deep ultraviolet (DUV) lithography equipment and the expansion of Changxin Memory Technologies (CXMT), were exacerbated by the lack of a special shareholder return policy announced during SK Hynix's earnings call. The combination of single-stock leveraged exchange-traded funds (ETFs) and margin trading has created a downward spiral, where declines lead to further declines. Currently, the KOSPI's 12-month forward price-to-earnings ratio (PER) stands at approximately 4.8, a historically low valuation. However, August may bring stabilizing factors to the market. Easing tensions between the U.S. and Iran have led to a rapid stabilization of oil prices. Additionally, the upcoming earnings reports from major U.S. tech companies will provide insights into the ongoing expansion of AI investments. Furthermore, the new regulations on single-stock leveraged ETFs, effective at the end of July, may reduce market volatility by alleviating excessive trading and concentration in large-cap stocks. Moving forward, the strategy should focus on gradually investing in semiconductor stocks with confirmed earnings and growth stocks that have seen excessive declines, rather than succumbing to fear-driven selling. As the effects of the single-stock leveraged ETF regulations begin to manifest, funds concentrated in Samsung Electronics and SK Hynix may diversify into the KOSDAQ and policy beneficiaries. Key Announcements After Market Close (July 29) LG U+ to buy back 90 billion won worth of shares to enhance shareholder value.Jusung Engineering reports second-quarter operating profit of 1.4 billion won, down 78% year-on-year.Krafton posts second-quarter operating profit of 410.9 billion won, a 67% increase.Samsung C&T reports second-quarter operating profit of 1.0317 trillion won, up 37.1% year-on-year.LG Electronics completes a 100 billion won share buyback, with a 500 won interim dividend per share.Hanwha Solutions reports second-quarter operating profit of 306.5 billion won, up 200.3% year-on-year.HD Hyundai Heavy Industries posts second-quarter operating profit of 1.0399 trillion won, up 120.6% year-on-year.SK Hynix reports second-quarter operating profit of 60.5426 trillion won, up 557.2% year-on-year. Fund Trends (As of July 28, Excluding ETFs) Domestic equity funds: 22.642 trillion wonOverseas equity funds: 2.22 trillion won Today's Schedule (July 30) Germany: GDP growth rate (Q2), Consumer Price Index (July)Eurozone: GDP growth rate (Q2), Consumer Confidence Index (July)U.S.: GDP growth rate (Q2), Personal Consumption Expenditures, Household Income (June), PCE Price Index (June)Korea Earnings: Samsung Electronics, Samsung Electro-Mechanics, Samsung SDI, LG Electronics, LG Energy Solution, SK Innovation, POSCO Holdings, Amorepacific, JBM, K-Bank, Kiwoom Securities, POSCO Future M, Korea Electric Power, Samsung SDS, Lotte Fine Chemical, etc.* This article has been translated by AI. 2026-07-30 07:00:00
  • Importance of Direction Over Speed in Korea-China FTA Phase 2 Negotiations
    Importance of Direction Over Speed in Korea-China FTA Phase 2 Negotiations In January, following President Lee Jae-myung's visit to China, the Korea-China Free Trade Agreement (FTA) Phase 2 negotiations were officially reactivated under an agreement between the two leaders to achieve "meaningful progress within the year." The 13th round of service and investment follow-up negotiations began in Beijing in January, followed by the 14th round in Seoul in April and the 15th round in Beijing in June, with negotiations continuing on a bimonthly basis.The Korea-China FTA, which took effect in 2015, focused on goods trade in its first phase, while the second phase addresses more sensitive and structural areas such as services, investment, and finance. Given the scale of economic exchanges between the two countries, this appears to be a natural evolution of their economic cooperation. In fact, Korea-China goods trade is expected to exceed $300 billion annually from 2021 to 2024, while service trade between the two countries remains at only $30.1 billion, accounting for less than 9% of total trade. This stark imbalance highlights both untapped potential and structural bottlenecks, making the need for negotiations evident.Although the two countries began follow-up negotiations in the service and investment sectors in March 2018, they remained effectively frozen due to the THAAD conflict, the Korean Wave restrictions, and escalating U.S.-China strategic competition. The resumption of negotiations, after nearly eight years of stagnation, is noteworthy not only for its economic benefits but also for the political necessity of managing strained bilateral relations and strengthening economic ties amid U.S.-China competition. In this context, the Phase 2 negotiations of the Korea-China FTA serve as a test for a new adjustment in Korea-China relations beyond mere trade issues.However, there is a clear difference in the positions of the two countries. For China, there is a need to restore the image of an "open China" as its economy slows and foreign investment declines, claiming that its service market is sufficiently open following its World Trade Organization (WTO) accession. Reflecting this, President Xi Jinping presented a "four-point cooperation proposal" during the summit, expressing hope that Korea would provide greater convenience in expanded service openings, as well as in cooperation on artificial intelligence (AI), biopharmaceuticals, green industries, cross-border payments in yuan, and digital currency. This suggests that China is calculating how to improve investment conditions for its companies in Korea while navigating U.S. containment efforts and tariff risks.South Korea aims to secure institutional access to the Chinese market through a negative list approach that expands the principle of openness and exceptions in the service, content, finance, and professional services sectors, amid concerns over the instability of its export structure and the need for industrial diversification. Additionally, South Korean companies seek to proactively enter emerging industries such as AI, edtech, and healthcare, which have gained competitive advantages since 2015, while also establishing communication channels to manage supply chain risks like the urea water crisis. The resolution of Korean Wave restrictions in the cultural and content sectors, normalization of game license issuance, and easing of K-content distribution regulations are also of national interest.In this regard, the positions of the two countries diverge. While China emphasizes "promoting practical cooperation," whether its notion of openness translates into actual institutional changes remains a separate issue. As is well known, China continues to adhere to its fundamental framework of protecting and controlling its domestic industries on key issues such as government procurement, intellectual property rights, and market entry under the negative list. In contrast, the South Korean government aims to create a free and open service trade and a predictable investment environment through these negotiations. Although less visible than tariff reductions, the focus is on enhancing the predictability of local business operations for South Korean companies.The core issue lies in "how to open" rather than "what to open." In this context, South Korea's concerns regarding China's aggressive stance can be summarized in three main points.First, China is the second-highest country among 42 major nations, following India, in terms of restrictions on foreign capital entry in the service sector. Even if openness is specified in the FTA agreement, the actual implementation phase may see "invisible regulations" that could diminish the practical effects of openness. There are also concerns about deepening economic security risks. The anti-espionage law and data security law allow for constant control under the guise of "national security," raising fears that South Korean companies could become targets of arbitrary law enforcement. Additionally, the "sandwich" risk arising from escalating U.S.-China tensions is a clear concern, as sensitive issues may collide with the U.S. containment framework against China.The Phase 2 negotiations of the Korea-China FTA represent both a cornerstone for restoring bilateral relations and an opportunity to carve out new pathways for South Korea's service industry, but they also come with significant threats. This is especially true for issues that intertwine economics, security, industry, and diplomacy. If the focus on improving relations overshadows the substantive content of the negotiations, the outcomes may remain symbolic while the risks persist. Being lured solely by the temptation of market openness could lead the negotiations to prioritize symbolism over substance and speed over safety. A politically expedient agreement may shine briefly, but poorly designed norms can burden businesses and industries for a long time.Therefore, South Korea's negotiation strategy should focus on how to refine the norms surrounding substantive openness and the associated risks.The key lies in refining the methods of openness rather than merely expanding the level of openness. First, even if market access is permitted in the agreement, procedural safeguards must be included to ensure "practical openness." Second, supply chains and economic security should be central to the negotiation agenda. Institutional safeguards, such as advance notification and consultation obligations for items that may face sudden export controls like urea water and rare earths, as well as the establishment of permanent hotlines, are essential. Furthermore, enhancing the effectiveness of investor protection and dispute resolution mechanisms, along with ensuring that intellectual property rights protection, data movement predictability, and curbing arbitrary law enforcement are key negotiation goals in the cultural content and data sectors.Ultimately, the success of the Korea-China FTA Phase 2 negotiations depends on the realization of the market's actual operational potential rather than the breadth of openness, and how well safety nets are designed to protect South Korean companies and industries during this process. What is needed now is a negotiation strategy that maintains a focus on direction over speed and content over timing, based on a sober recognition of reality. This Phase 2 negotiation could serve as a litmus test for the future of Korea-China economic relations and South Korea's overall foreign economic strategy, as well as for setting the overall direction of Korea-China relations moving forward. 2026-07-30 07:00:00
  • Trump Warns of Strong Retaliation After Iran Missile Attack
    Trump Warns of Strong Retaliation After Iran Missile Attack President Donald Trump has warned of a strong retaliation following Iran's missile attack on a U.S. military base in Jordan.On July 29, local time, Trump referenced the Iranian attack, stating, "Now it's our turn," and promised to strike them "very hard."In a phone interview with Fox News, Trump used strong language, saying, "We will hit them hard. They will be hit."Earlier, the Iranian Revolutionary Guard Corps (IRGC) announced that it had launched ballistic missiles targeting the Muwaffaq Salti Air Base in Jordan, where U.S. forces are stationed.The Jordanian military reported that it intercepted five Iranian missiles that entered its airspace. No casualties among U.S. personnel have been reported.The United States had suspended airstrikes against Iran on July 24 after 13 days of operations. However, with Trump's warning of retaliation, the likelihood of resuming airstrikes against Iran has increased.The U.S. has also targeted armed groups linked to Iran in Iraq. On July 28, U.S. forces, in coordination with Saudi Arabian troops, conducted airstrikes against facilities used by pro-Iranian armed groups in Iraq.U.S. Central Command stated that these groups were involved in attacks on U.S. and Saudi energy facilities.Trump has left the door open for negotiations with Iran, saying, "We will see if we can reach an agreement at some point," while emphasizing a strong response to Iran for now.* This article has been translated by AI. 2026-07-30 06:56:00
  • Israeli Army Chief Warns of Deeper Incursion into Lebanon if Necessary
    Israeli Army Chief Warns of Deeper Incursion into Lebanon if Necessary Israeli Army Chief of Staff Eyal Zamir has warned that military operations in Lebanon could expand further.On July 29, local time, Zamir visited the southern operational area in Lebanon and stated, "If necessary, we will advance deeper and reach other areas."Zamir emphasized, "The military operations ongoing on various fronts are not over yet," adding that plans are being prepared to respond to any changes in the situation.This statement comes amid rising tensions between the Israeli military and the Iran-aligned militant group Hezbollah in Lebanon.On the same day, the Israeli military reported that Hezbollah attacked an Israeli unmanned bulldozer with a drone carrying explosives in southern Lebanon. No casualties were reported.The Israeli military has classified this attack as a violation of the ceasefire agreement and is reviewing its response options.* This article has been translated by AI. 2026-07-30 06:48:10
  • Drone Attack Reported on U.S.-Owned LNG Vessels in Egypt
    Drone Attack Reported on U.S.-Owned LNG Vessels in Egypt A U.S.-owned liquefied natural gas (LNG) storage and supply vessel docked at Egypt's Damietta Port was reportedly attacked by a drone. The fire spread to a nearby LNG carrier, but no casualties were reported.According to Reuters on July 29, the British maritime security firm Ambrey stated that the 'Energos Winter' appeared to have been struck by a drone.Industry sources indicated that the fire from the Energos Winter spread to the nearby LNG carrier 'Gaslog Salem.' Other security sources also reported an explosion resulting from the drone attack.The Energos Winter is a floating storage and regasification unit (FSRU) owned by U.S. company Energos Infrastructure, which stores LNG and converts it back to gaseous natural gas for land supply.Egypt's Ministry of Petroleum and Mineral Resources confirmed that two gas-related vessels at Damietta Port caught fire. The fire has been extinguished, and no deaths or injuries have been reported.However, the Egyptian government has not confirmed the cause of the fire or the occurrence of a drone attack.As of now, no country or armed group has claimed responsibility for the attack.* This article has been translated by AI. 2026-07-30 06:44:00
  • Iran Condemns U.S.-Saudi Airstrikes on Pro-Iran Forces in Iraq
    Iran Condemns U.S.-Saudi Airstrikes on Pro-Iran Forces in Iraq Iran has strongly condemned airstrikes conducted by the United States and Saudi Arabia against pro-Iran armed groups in Iraq.On July 29, the Iranian Foreign Ministry issued a statement labeling the attacks as a "clear violation of Iraq's sovereignty and territorial integrity." It also claimed that the strikes contravened the United Nations Charter and international law.The ministry noted that the airstrikes targeted facilities owned by the Iraqi government and those supporting Shiite pilgrims, warning that the responsibility for the consequences of these attacks lies with the United States and its supporting nations.The U.S. Central Command had previously announced that it conducted precision strikes against pro-Iran armed groups in Iraq on July 28, aimed at forces that had recently directed attacks on U.S. and Saudi energy facilities.The Saudi Defense Ministry also confirmed that it carried out limited airstrikes in coordination with the U.S. against pro-Iran armed groups in Iraq linked to attacks on its oil facilities.The Popular Mobilization Forces (PMF) in Iraq reported that at least 20 of its members were killed and 32 injured in the airstrikes. The PMF is an armed group operating under the Iraqi government, with many members affiliated with pro-Iran Shiite factions.The Iraqi government criticized the airstrikes as a "violation of sovereignty" and stated it would strengthen control over armed groups to prevent Iraqi territory from being used for attacks on neighboring countries.The Iraqi National Security Council has decided to enhance government control across the country and develop security measures to respond to further violations of sovereignty.* This article has been translated by AI. 2026-07-30 06:40:00
  • U.S. Patriot Missile Stockpiles Plummet Amid Ongoing Iran Conflict
    U.S. Patriot Missile Stockpiles Plummet Amid Ongoing Iran Conflict The ongoing conflict in Iran has led to a significant reduction in U.S. military stockpiles of key interceptor missiles, now estimated to be at just 40% of pre-war levels. According to the Center for Strategic and International Studies (CSIS), as of July 27, the U.S. military's inventory of Patriot interceptor missiles is estimated to be between 759 and 827 units, down from approximately 2,330 units just before the war began in February. Similarly, the stockpile of Terminal High Altitude Area Defense (THAAD) interceptor missiles has decreased from 452 to an estimated 234 to 278 units during the same period. Combined, the stockpiles of these two missile types total between 993 and 1,105 units, which is only about 36% to 40% of the 2,782 units available before the conflict. The challenge lies in the lack of immediate replacements for the Patriot and THAAD systems, which are critical for protecting U.S. forces and key bases in the Middle East from Iranian ballistic missiles. CSIS noted, “Standard missiles deployed on U.S. Navy ships can intercept ballistic missiles, but these vessels are often far from inland military bases, making them inadequate substitutes for Patriot and THAAD systems.” As stockpiles dwindle, the U.S. military has begun to conserve interceptor missile usage. NBC reported that the military sometimes refrains from intercepting Iranian missiles if they are deemed to be heading toward areas without personnel or critical infrastructure. The shortage of interceptor missiles poses a challenge not only in the Middle East but also for U.S. forces in the Western Pacific, where they must prepare for potential conflicts with China. CSIS predicts that replenishing the expended missiles could take years, as increasing production of advanced interceptors is not feasible in the short term. Concerns about the declining stockpile have also been raised within the U.S. military. General Dan Cain, Chairman of the Joint Chiefs of Staff, reportedly informed President Donald Trump that the ongoing war with Iran could further deplete essential munitions, impacting military operations in other regions. However, the U.S. Department of Defense maintains that it has sufficient military capabilities to meet its needs.* This article has been translated by AI. 2026-07-30 06:32:00
  • U.S. and Saudi Airstrikes Kill Five Iranian Military Advisors in Iraq
    U.S. and Saudi Airstrikes Kill Five Iranian Military Advisors in Iraq U.S. and Saudi airstrikes targeting Iranian-backed militias in Iraq have resulted in the deaths of five Iranian military advisors, according to a report by AFP on July 29. Sources from the Popular Mobilization Forces (PMF), an armed group affiliated with the Iraqi government, confirmed to AFP that the Iranian advisors were killed in airstrikes conducted in Diyala province, located in central Iraq. AFP reporters observed coffins draped in Iranian flags at a funeral for the airstrike victims held in Baghdad. However, Iranian media reported a different death toll. The Iranian daily Hamshahri stated that four military advisors from the Islamic Revolutionary Guard Corps (IRGC) were killed in the airstrikes the previous night. Iranian authorities have yet to officially confirm the deaths of their military advisors or provide an accurate assessment of the damage. Previously, the PMF reported that at least 20 of its members had died and 32 were injured in the airstrikes. The PMF includes several Iranian-aligned Shiite armed groups.* This article has been translated by AI. 2026-07-30 06:24:00
  • Fed Holds Interest Rates Steady at 3.50% to 3.75%, Three Members Call for Hike
    Fed Holds Interest Rates Steady at 3.50% to 3.75%, Three Members Call for Hike The Federal Reserve has decided to keep its benchmark interest rate steady at 3.50% to 3.75%. However, three of the 12 members of the Federal Open Market Committee (FOMC) expressed support for a rate hike, citing concerns over inflation pressures due to rising international oil prices.On July 29, following a two-day FOMC meeting, the Fed announced it would maintain the current rate.This marks the fifth consecutive hold this year, following similar decisions in January, March, April, and June. It is the second hold since Kevin Wash took office as Fed Chair.The decision was made with a vote of 9 in favor and 3 against. In June, all 12 members had supported keeping rates unchanged.This time, dissenting votes came from Beth Hammack, president of the Cleveland Federal Reserve Bank; Neel Kashkari, president of the Minneapolis Fed; and Lorie Logan, president of the Dallas Fed, who advocated for a 0.25 percentage point increase.The increase in international oil prices due to tensions between the U.S. and Iran has led to heightened inflationary pressures domestically, prompting some Fed members to argue for a rate hike.In its monetary policy statement, the Fed noted, “Despite increased uncertainty from conflicts in the Middle East, economic activity continues to expand at a solid pace.”The employment situation was also described as relatively stable, with job growth aligning with labor force increases and the unemployment rate remaining largely unchanged. Productivity and business investment are also reported to be strong.However, the Fed expressed caution regarding inflation. It stated, “Inflation remains above the committee’s 2% target,” adding that rising energy prices are impacting the costs of certain goods.Chair Wash emphasized the Fed's commitment to price stability during a press conference. He stated, “There is only one target, and that is 2%,” asserting that there is no softened inflation target.He further noted that the prolonged high inflation over the past five years has led some households, businesses, and markets to mistakenly believe that the Fed is tolerating inflation rates above 2%, which he dismissed as a “misconception.”There remains a possibility of future rate increases. Projections from the FOMC members released in June indicated that the benchmark rate could be 0.25 percentage points higher by the end of the year. With three members advocating for an immediate increase in this meeting, the market is closely watching whether the Fed will raise rates in its upcoming September meeting.President Donald Trump did not directly criticize Chair Wash for the Fed's decision to hold rates steady. When asked at the White House if he was disappointed with Wash, Trump replied, “No. Kevin is fantastic, brilliant, and smart.”However, he criticized other Fed officials who favor maintaining higher rates, stating, “He has a board.” Trump has consistently called for rate cuts from the Fed.Meanwhile, the Fed's decision to hold rates steady keeps the interest rate gap between South Korea and the U.S. at 1.00 percentage points. The Bank of Korea's Monetary Policy Committee raised its benchmark rate from 2.50% to 2.75% on July 16.* This article has been translated by AI. 2026-07-30 06:16:00