All Three Major New York Stock Indices Close Lower... Scorching 37°C Heat Ahead of 'Cheoseo' [Morning Briefing]

◆ The Three Major New York Stock Indices Closed Lower Together

All three major stock indices on the New York Stock Exchange closed lower. On the 21st local time, the Dow Jones Industrial Average ended at 44,785.50, down 152.81 points (0.34%) from the previous session. The Standard & Poor's (S&P) 500 Index dropped 25.61 points (0.40%) to 6,370.17, and the Nasdaq Composite finished at 21,100.31, down 72.55 points (0.34%). The S&P 500 Index has fallen for five consecutive trading days. There was significant intraday volatility in the major indices. The Dow Jones extended its decline to -0.80% before narrowing it to -0.10%, showing choppy movement. Overall, the market ended slightly weak as Walmart's Q2 results disappointed, weakening investor sentiment toward blue-chip stocks. While the sell-off in tech stocks has somewhat eased, persistent concerns about high valuations mean investors appear to be taking a breather.

◆ US Expert: "Lee Should Refrain from Immediate Response Even If Trump States 'Incorrect Numbers'"

Experts suggest that at the upcoming South Korea-US summit on the 25th, even if US President Donald Trump brings up false numbers or makes inaccurate statements, President Lee Jae-myung should refrain from immediately responding. Scott Snyder, Director of the Korea Economic Institute (KEI), said at a seminar hosted by the institute on the 21st that if President Trump mentions 'incorrect defense cost figures' repeatedly in front of reporters during the summit, it is better for "people from both sides" to correct the record after the meeting, rather than President Lee responding on the spot.

During last year's presidential election, Trump made several statements citing incorrect numbers, such as referring to the number of US troops stationed in Korea—typically around 28,500—as 40,000 when discussing cost-sharing negotiations with South Korea. Snyder commented, "It is unrealistic to expect Trump’s misstatements to be corrected in real time," but added, "That doesn't mean they can simply be ignored." He further said, "President Zelensky (of Ukraine) endured a very uncomfortable moment in the Oval Office months ago but returned later that week and had a rather good interaction," stressing, "what matters isn’t just what happens in that moment, but how you respond in the subsequent meeting." With President Lee, the situation differs from European counterparts like President Zelensky, as he must communicate through an interpreter, making immediate responses to Trump’s remarks both an advantage and a drawback, according to Snyder.

Erius Dair, KEI’s Head of Communications, advised to "prepare for the possibility that Trump may make extemporaneous or off-the-cuff remarks that differ completely from or even conflict with outcomes derived from existing bilateral agreements, such as on trade or North Korea." He emphasized, "Regardless of what is expected for August 25 (the summit), you also need to be ready for the unexpected." Dair added, "President Trump tends to attempt to act on what he says," projecting that the issues of defense spending and cost-sharing may be presented as results of the summit, given Trump's repeated emphasis on them. He also advised, "There is a good chance President Trump will ask President Lee about China, so President Lee should be prepared for that.”

◆ National Assembly to Vote on the 'EBS Law' After Ending Filibuster Today

On the 22nd, the National Assembly will vote on the revision of the Korea Educational Broadcasting System (EBS) Act, the final bill among the so-called "Three Broadcasting Laws." The amendment aims to increase the number of EBS board members from 9 to 13 and diversify the nominating bodies. The People Power Party is currently conducting a filibuster against the bill, which was presented to the Assembly in the previous session. However, due to a request by the Democratic Party, the vote to end the filibuster is expected to take place around 10:43 a.m.—exactly 24 hours after Rep. Choi Hyung-doo of the People Power Party began his speech the day before. Given the Democratic Party’s firm majority, it is expected that the filibuster will end, and the bill will pass the plenary session on the morning of the 22nd.

◆ People Power Party’s Convention to Elect New Leadership... Run-off Vote Possible

The People Power Party is holding a convention on the afternoon of the 22nd at Oscor in Cheongju to elect a new leadership team. One party leader, four top committee members, and one youth committee leader will be elected. Candidates for party leader include Kim Moon-soo, Ahn Cheol-soo, Jang Dong-hyuk, and Cho Kyung-tae (in alphabetical order). If no candidate receives more than half of the votes, a run-off between the top two will be held to elect the leader on the 26th. There are eight candidates for top member: Kim Geun-sik, Kim Min-soo, Kim Jae-won, Kim Tae-woo, Son Beom-gyu, Shin Dong-wook, Yang Hyang-ja, and Choi Su-jin, and two for youth top member: Son Su-jo and Woo Jae-jun. The term for the new leadership is two years.

◆ When You Turn 18, The Country Will Cover 3 Months of National Pension Contributions

The Lee Jae-myung administration has unveiled new policies to address old-age insecurity among young people. According to the Ministry of Health and Welfare and the Presidential National Planning Committee, from 2027, when a young person between the ages of 18 and 26 first enrolls in the National Pension plan, the government will cover three months of contributions. Roughly 451,000 young people turning 18 in 2027 are expected to benefit. Those who enrolled before age 18 or did not apply by 26 will still have a three-month coverage period granted ex officio. With the National Pension, the longer you contribute, the higher your retirement benefit, so enrolling as soon as possible is advantageous. This policy sends a strong signal that the government will ensure at least a minimum level of retirement preparedness for youth entering society. The initiative, once scrapped due to opposition from relevant departments during Lee’s term as Gyeonggi Governor, is now being rolled out nationwide.

◆ Highs Up to 37°C... Showers in Parts of Southern Regions

On Friday the 22nd, the day before Cheoseo, hot weather will continue. As of 5 a.m., major cities reported the following temperatures: Seoul 26.3°C, Incheon 26.7°C, Suwon 24.8°C, Chuncheon 25.0°C, Gangneung 26.4°C, Cheongju 26.7°C, Daejeon 26.1°C, Jeonju 26.6°C, Gwangju 26.2°C, Jeju 27.2°C, Daegu 25.3°C, Busan 27.2°C, Ulsan 25.0°C, Changwon 26.0°C, etc. The forecasted high for the day is between 31 and 37°C. With heat wave alerts in effect for most of the country, the real-feel temperature is expected to hover around 35°C, making conditions extremely hot for the time being. Tropical nights are expected in cities and coastal areas. There will be frequent clouds nationwide, with occasional raindrops in inland South Chungcheong and North Jeolla regions until morning. The forecast for rainfall: Jeolla: 5–40mm; Gyeongsang: 5–60mm; Jeju: 5–20mm. Fine dust levels are expected to be 'good' to 'moderate' throughout the regions.

Yerang Kim, Hankyung.com Reporter yesrang@hankyung.com