[Morning Briefing] U.S. stocks finish flat despite Iran strike…prospect of prolonged campaign including ground troops

◆ New York stocks end mixed…market judges “uncertainty removed”

On the first trading day after the large-scale U.S. and Israeli military operation against Iran, major New York stock indexes ended mixed on the 2nd local time. The Dow Jones Industrial Average fell 0.15% from the previous session to 48,904.78, the S&P 500 rose 0.04% to 6,881.62, and the Nasdaq gained 0.36% to 22,748.86. Stocks had been expected to drop on fallout from the weekend’s shift into all-out war, but investors viewed the latest Iran strike—which had been anticipated to some extent—as “removing uncertainty” and stepped in to buy the dip, flipping the tone and leaving the market to close near flat.

◆ Oil and natural gas “surge”…Strait of Hormuz blockade

International crude prices and natural gas prices in Asia and Europe jumped. As of the 2nd local time, Brent crude futures for May delivery settled at $77.74 a barrel, up 6.7% from the prior session, while West Texas Intermediate (WTI) futures for April delivery also settled at $71.23 a barrel, up 6.3%. At one point during the session, prices spiked by double digits per barrel, underscoring the shock. With Iran blocking the Strait of Hormuz, which handles about 20% of global LNG volumes, analysts also speculate that—depending on how the situation unfolds—international oil prices could easily top $100.

◆ U.S. does not rule out deploying ground troops to Iran

The escalation is intensifying, with the U.S. not ruling out a medium- to long-term campaign and the possibility of deploying ground troops. U.S. President Donald Trump said at the White House on the 2nd local time, while awarding the Medal of Honor to veterans, “I don’t care how long it takes. I expected it would take 4–5 weeks, but we have the ability to keep it going longer than that.” He also told media interviews that he has no “yips” about ground forces and that “we haven’t even begun a strong attack,” signaling he is not excluding the possibility of a ground deployment.

◆ Kang Sun-woo and Kim Kyung, accused in “₩100 million nomination donation” case, face warrant review today

Rep. Kang Sun-woo (independent) and former Seoul city council member Kim Kyung, accused of exchanging ₩100 million in nomination-related donations ahead of the 2022 local elections, will undergo a substantive warrant review (a pre-arrest hearing) on the 3rd, putting them at a crossroads over detention. This comes one week after the National Assembly plenary passed a motion consenting to Kang’s arrest. Kang claims she did not know the shopping bag she received from Kim contained bundles of cash and that she returned it after recognizing what it was. Kim abruptly left for the U.S. after the investigation began, returned 11 days later, submitted a written confession, and has appeared to cooperate with investigators.

◆ Jeongwol Daeboreum brings a total lunar eclipse…snow in Gangwon’s mountains

Today (the 3rd), Jeongwol Daeboreum, will be cloudy nationwide, with the Seoul metropolitan area, Chungcheong, Jeolla, and western Gyeongsang expected to gradually clear from the evening. Snow or rain is forecast in parts of the country, including heavy snow in the mountainous areas of Gangwon; visibility may be reduced, and icy roads and black ice are possible in some places. Daytime highs are forecast at 5–16°C, and fine dust levels are expected to be “good” across all regions. A total lunar eclipse is also forecast at night, and in clear areas observers may be able to see a “blood moon (red moon).”

Kim Bong-gu, Hankyung.com reporter kbk9@hankyung.com