New York Stock Exchange Falls Ahead of US Interest Rate Decision... Conclave Opens Today [Morning Briefing]

◆ New York Stock Exchange Falls Ahead of US Interest Rate Decision

The three major indices of the New York Stock Exchange fell on the 6th (local time), a day before the US Federal Reserve (Fed) announces its interest rate decision, as uncertainties related to US trade negotiations persisted. On the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 40,829.00, down 389.83 points (-0.95%) from the previous session. The Standard & Poor's (S&P) 500 index fell 43.47 points (-0.77%) to 5,606.91, and the Nasdaq Composite Index closed at 17,689.66, down 154.58 points (-0.87%). Contrary to expectations that US President Donald Trump would announce progress on trade negotiations as early as that day, no significant progress was announced, disappointing the market, which had hoped for some uncertainty to be resolved. Additionally, as the Fed is set to conclude its Federal Open Market Committee (FOMC) meeting and decide on interest rates on the 7th, a wait-and-see attitude spread.

◆ International Oil Prices Surge on US Shale Industry's Production Cut Outlook

International oil prices surged as expectations for production cuts in the US shale oil industry emerged. As oil prices had recently plummeted due to increased production by the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC oil-producing countries such as Russia, US shale companies are adjusting their production. On the New York Mercantile Exchange, the price of West Texas Intermediate (WTI) crude for June delivery, the nearest month, closed at $59.09 a barrel, up $1.96 (3.43%) from the previous session. The global benchmark Brent crude for July delivery rose $1.92 (3.19%) to $62.15 a barrel. The production cut outlook of Diamondback Energy, the largest independent oil producer in the Permian Basin, the center of US shale oil, led to a rebound in investor sentiment. The company recently announced that it would lower its production outlook for this year and reduce capital expenditures, reflecting the recent sharp drop in oil prices.

◆ Kim Moon-soo and Han Duck-soo to Meet at 6 PM... Discussing Unification

Kim Moon-soo, the presidential candidate of the People Power Party, and Han Duck-soo, an independent presidential candidate, will meet today to discuss the issue of candidate unification. Both candidates' teams announced that the meeting is scheduled for 6 PM, and the location will be disclosed at the appointed time. As Kim recently opposed the party leadership's intervention demanding swift unification, causing internal conflict, the sudden meeting between the two candidates draws attention. Additionally, the People Power Party will conduct a public opinion poll today on whether to support the unification of the 21st presidential candidate among party members.

◆ 'Papal Election' Conclave Opens Today

The conclave, the secret meeting of cardinals to elect a new pope for the Catholic Church, which has 1.4 billion believers worldwide, opens at the Sistine Chapel in Vatican City. Voting rights are granted to cardinals under the age of 80 as of the day before the 'Apostolic See,' the position of the pope, becomes vacant. This conclave involves 133 cardinals from 70 countries across five continents. Initially, there were 135 eligible voters, but Cardinal John Njue of Kenya and Cardinal Antonio Cañizares Llovera of Spain are absent due to health reasons.

◆ Trump's Shift in Stance on Tariffs

US President Donald Trump, who had previously described tariffs only positively, is now acknowledging some economic burdens caused by tariffs and is urging Americans to endure them, according to foreign media such as the Washington Post. US media, including the Washington Post and The Hill, evaluated that President Trump's recent messages on tariffs have changed. While President Trump had claimed that tariffs would make America richer, he is now describing them as a cost that must be endured temporarily for the improvement of the US economy, rather than completely denying the inflationary factors of tariffs. In an NBC interview on the 4th, President Trump said about his remarks at a cabinet meeting, "We don't have to waste money on trade deficits with China to buy things we don't need, unnecessary junk."

◆ India Launches Missile Strikes on Nine Locations in Pakistan Amid Terror Tensions

India launched missile attacks targeting Pakistan amid tensions triggered by terrorism. According to AP and Reuters, the Indian government announced in a statement that its military had launched 'Operation Sindhur,' attacking nine locations in Pakistan and Pakistan-occupied Jammu and Kashmir. India added that Pakistani military facilities were not the targets of the attack. Pakistani security authorities also reported that India fired three missiles into Pakistan-controlled territory early in the morning, killing one child and injuring two others.

◆ Mostly Clear Nationwide with Large Temperature Differences... Morning Fog in Southern Inland

On Wednesday the 7th, the weather will be mostly clear nationwide, but there will be cloudy areas in the inland and mountainous regions of Gangwon and Gyeongsang Province from the afternoon. There will be dense fog with visibility less than 200 meters centered in the southern inland until the morning, so caution is advised for traffic safety. The highest daytime temperature is forecasted to be between 17 and 23 degrees. The temperature difference between day and night is expected to be around 15 degrees, especially in inland areas. The fine dust concentration will be at 'good' to 'moderate' levels across all regions due to smooth atmospheric diffusion.

Oh Jung-min, Hankyung.com Reporter blooming@hankyung.com