Tariff Uncertainty Becomes an Excuse for Profit-Taking… Decline Despite Negotiation Room [New York Stock Market Briefing]

The major indexes on the New York Stock Exchange closed lower as uncertainty expanded after U.S. President Donald Trump sent tariff letters to key trading partners.

On the 7th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average fell 422.17 points (0.94%) to 44,406.36, the S&P 500 Index dropped 49.37 points (0.79%) to 6,229.98, and the NASDAQ Composite Index lost 188.59 points (0.92%) to close at 20,412.52.

President Trump’s tariff letters chilled investor sentiment. The content stated his intention to impose reciprocal tariffs on seven countries, including South Korea and Japan, starting from the 1st of next month. President Trump announced a 25% tariff would be imposed on South Korea and Japan. The White House added that, in addition to South Korea and Japan, 12 more countries would receive tariff letters.

The market, which had seen a sharp rise in the past three weeks, took the tariff uncertainty as an opportunity for profit-taking. Although they left room for negotiations, saying they would negotiate until August 1, it acted only as a negative factor for the market.

President Trump’s threat to impose an additional 10% tariff on countries aligning with the anti-U.S. policies of the emerging economic bloc BRICS further dampened investor sentiment.

By sector, all sectors except consumer staples and utilities declined. Consumer discretionary and materials sectors fell by more than 1%.

Among major tech companies with a market capitalization over $1 trillion, all but Amazon, which closed slightly higher, ended lower.

Apple fell by 1.69% after White House trade adviser Peter Navarro pressured that Apple's moves to reduce its exposure to China were not proceeding fast enough.

Tesla dropped 6.79% after CEO Elon Musk announced the formation of a new political party, the 'America Party,' and his deeper political engagement.

Due to tariff uncertainties, the ADRs of Toyota Motor Corporation and Honda Motor Co., Ltd., listed on the New York Stock Exchange, fell by approximately 4% each. SK Telecom dropped more than 7%, and LG Display more than 6%.

According to the Chicago Mercantile Exchange (CME) FedWatch Tool, the probability of the Federal Funds Rate remaining unchanged in July was maintained at 95.3% in the federal funds futures market.

The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) rose by 0.31 points (1.77%) to 17.79.

Case Han, reporter at Hankyung.com case@hankyung.com