The New York Stock Exchange, which had been soaring on the back of the artificial intelligence (AI) boom, has turned blue due to concerns about a rekindling of the US-China trade war.
On the 10th (local time), the tech-heavy Nasdaq Composite Index closed at 22,204.43, down a whopping 3.56%. This was the largest drop in about six months, since April 10th (4.31%), when uncertainty surrounding bilateral tariffs was at its peak. On that day alone, the market capitalization of the New York Stock Exchange fell by approximately $2 trillion (approximately 2,870 trillion won). In particular, the market capitalization of the "Magnificent 7" (M7), a group of large tech stocks, evaporated by approximately $770 billion (approximately 1,105.72 trillion won) in a single day. The stock market, which had been rising on positive news about AI, was instantly frozen by a single comment from U.S. President Donald Trump, who threatened a "100% additional tariff on China." The Chicago Board Options Exchange (CBOE) Volatility Index (VIX), also known as the "fear index," rose to 21.66. It soared to 22.42 during the session, recording its highest level since June 19.
The cryptocurrency market also experienced a sharp decline. Bitcoin, the dominant cryptocurrency, hovered around $111,000 on the day, down more than $10,000 from its all-time high of $126,200 set on the 6th of this month. Other coins, including Ethereum, the second-largest cryptocurrency by market cap, and XRP (Ripple), also saw their prices drop. According to CoinGlass, a coin data analysis firm, the plunge resulted in large-scale liquidations among traders who had placed long positions (bounce bets), resulting in losses totaling approximately $7 billion (approximately 10 trillion won).
Meanwhile, preference for safe assets has increased. The yield on the 10-year U.S. Treasury note, which had been falling due to the stock market boom and expectations of a Federal Reserve (Fed) interest rate cut, fell 0.105 percentage points to 4.034% from the previous trading day. This is because, unlike the stock market, buying pressure has concentrated on Treasury bonds. Bond yields and prices move inversely. Demand for gold, which recently hit record highs, has grown even stronger. According to market research firm Investing.com, spot gold prices rose 1.03% to $4,017.79 per troy ounce. The price has been on a strong upward trend since first surpassing $4,000 on the 8th of this month.
- Reporter Jo Yang-jun
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