Confidence in U.S. markets is shaking amid rising "Trump risk," leading to a rare triple drop in stocks, the dollar, and government bonds. Meanwhile, gold has surged past the $3,400 mark.
On the 22nd, the Korean stock market opened lower in response to deteriorating investor sentiment and rising volatility driven by the so-called "Sell USA" trend. The KOSPI fell -0.29% and the KOSDAQ dropped -0.56% from the previous session.
Overnight, all three major U.S. indices experienced sharp declines of more than 2%. The Dow Jones Industrial Average fell -2.48%, the S&P 500 -2.36%, and the Nasdaq Composite -2.55%. Major tech stocks also plummeted, including Nvidia (-4.5%) and Tesla (-5.8%).
The U.S. Dollar Index, which measures the value of the dollar against a basket of other currencies, dropped below the 99 mark for the first time in three years. Long-term U.S. Treasury bond prices also fell.
As trade negotiations made little progress and former President Donald Trump increased pressure on Federal Reserve Chair Jerome Powell to cut interest rates and even step down, capital flight from U.S. financial markets has accelerated.
Min Kyung-won, a researcher at Woori Bank, commented, “If the Fed’s independence is compromised, uncertainty around future monetary policy rises, weakening trust in dollar-based assets.”
Han Ji-young, an analyst at Kiwoom Securities, explained, “Although there was no new tariff-related shock, Trump’s rate-cut pressure on the Fed, a resulting fall in the dollar, lower interest rates, and caution over M7 (major U.S. tech firms) earnings led to broad market weakness. This ultimately resulted in a ‘Sell USA’ phenomenon with widespread asset sell-offs.”
With the dollar weakening at a historic pace and little sign of an immediate rebound, gold prices have surged beyond $3,400, and Bitcoin is emerging as a new safe haven.
According to Investing.com, spot gold was trading around $3,433 per ounce in the morning—up sharply from just a week ago, when it surpassed the $3,300 mark on the 16th.
Bitcoin, which had dropped below the $80,000 level earlier this month, has now climbed back above $87,300.
Park Sang-hyun, a researcher at iM Securities, noted, “The sharp drop in the dollar is boosting alternative assets. Gold, in particular, is enjoying a powerful rally, and Bitcoin is showing strength as well—recovering to the $87,000 level despite the tech stock plunge.”
