August 20, 2025 - Global Key Issues and Market Impact
Global Key Issues
- US-Europe Policy Changes: The Trump administration's 50% tariffs on steel and aluminum accelerate the restructuring of global supply chains. The US and Europe have reached a security guarantee agreement regarding Ukraine, while protectionism is expanding, directly impacting related industries.
- AI Bubble Warning: OpenAI's Sam Altman reiterates warnings about an AI bubble. The sharp rally led by Nvidia and big tech has eased, with investor focus shifting to sectors like pharmaceuticals, biotech, and utilities in a rotation strategy.
- Global Risk-Off Sentiment: The US VIX volatility index surged past 15, and risk assets like Bitcoin also declined sharply.
Sector Impact
| Sector | Main Impacts and Current Status |
|---|---|
| IT/Tech (Big Tech) | Major US tech stocks fell (worst day for Nasdaq 100 since April tariffs), AI chips and big tech saw correction. |
| Automotive | Negative impact from broad tariffs on exports and production, new US plants opening (including expanded overseas production in Korea). |
| Pharmaceutical/Biotech | Strong in rotation, expected R&D progress, focus on obesity and cancer drugs in second half. |
| Utilities | Turned strong amid supply concerns, considered defensive in rotation. |
| Construction/Building Materials | Large operating profit drop (42.5% decline first half), domestic and overseas recession, delayed demand recovery. |
| Secondary Batteries | Performance drop due to weak electric vehicle sales (-21%). |
| Shipbuilding/Display | Benefit from China deterrence, expected solid performance. |
| Textiles/Steel | Continued weakness due to two consecutive years of oversupply and tariff effects. |
Sector performance and outlook show marked polarization due to US elections, China containment, global demand slowdown, and supply chain changes.
Major Stocks Status (As of August 19 Closing)
| Stock | Daily Change | Year-to-Date | Market Cap |
|---|---|---|---|
| Nvidia | -3.04% | +38.63% | $4.39T |
| Microsoft | -1.20% | +20.13% | $3.85T |
| Apple | -0.19% | +1.70% | $3.31T |
| Amazon | -1.50% | +27.53% | $2.24T |
| Meta | -2.02% | +42.74% | $1.96T |
| Broadcom | -3.71% | +77.27% | $1.29T |
| Alphabet | -0.88% | +19.38% | $1.1T |
| Tesla | -1.86% | +47.63% | $1.01T |
Big tech leads the decline while rotation into other sectors drives active capital flow.
Bond Market Impact
- US 10-Year Treasury Yield: Closed higher at 4.30-4.32% on August 19. Fell slightly over the past month (down 0.14%). Despite expectations for three rate cuts by the Fed this year, market confidence is wavering. September FOMC meeting is closely watched.
- Korean and Global Bond Markets: Rate cut cycle continues alongside large-scale bond issuance. Investor sentiment remains positive but rising supply could increase volatility. Foreign inflows into bonds are expected to grow.
- Eurozone, Japan, and China: Eurozone and China maintain easing monetary policies, while Japan considers interest rate hikes.
Summary
Stock Market: Big tech adjustment and rotation into defensive sectors stand out, with clear polarization between growth-focused industries and weaker sectors.
Bond Market: Short-term bond strength amid easing rates, but long-term volatility expected due to increased issuance. US 10-year Treasury yields hover around 4.3%.
Global Issues: Intensifying US-China trade tensions, rise in protectionism, AI bubble warnings, and geopolitical risks related to Ukraine and Russia remain key concerns.
Overall, global financial and real markets continue to experience high volatility amid uncertainty and policy changes.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Please consult a qualified advisor before making investment decisions.
