The Korean stock market hits the circuit breaker upward

On March 4th, local time, global capital markets gradually recovered from geopolitical shocks, with technical rebounds driving major stock indices higher across the board. By the close, the Dow rose 0.49% to 48,739.41 points, the S&P 500 increased 0.78% to 6,869.5 points, and the Nasdaq gained 1.29% to 22,807.48 points. The VIX volatility index also fell sharply by over 10%.

European markets also closed higher collectively, with Germany’s DAX up 1.74% at 24,205.36, France’s CAC40 up 0.79% at 8,167.73, and the UK’s FTSE 100 up 0.8% at 10,567.65.

On March 5th, Beijing time, the Japanese and Korean markets also opened strongly. The Nikkei 225 and Korea Composite Index both opened sharply higher. As of the latest update, the Nikkei 225’s gains expanded to over 3%, and the Korea Composite Index’s gains widened to 10%. The Korea Exchange triggered the KosDAQ index circuit breaker, pausing trading for 5 minutes due to programmatic trading.

Technology Stocks Drive Slight Rebound in U.S. Major Indices

On March 4th, U.S. stock indices closed higher across the board, with the Dow up 0.49% at 48,739.41 points, the S&P 500 up 0.78% at 6,869.5 points, and the Nasdaq up 1.29% at 22,807.48 points.

In the market, most large tech stocks rose, with the seven major U.S. tech giants index up 1.13%. Notable individual stocks included Amazon, up nearly 4%; Tesla, up over 3%; Meta, up nearly 2%; Nvidia, up over 1%; Microsoft, up 0.31%; Apple, down 0.47%; and Google, down 0.15%.

Chip stocks generally rose, with the Philadelphia Semiconductor Index up 1.93%. Advanced Micro Devices (AMD) surged nearly 6%, Intel and Micron Technology both up over 5%, ASML and Lam Research up over 2%.

Most Chinese concept stocks also rose, with the Nasdaq Golden Dragon China Index up 0.8%. Popular Chinese stocks included Zai Lab, up over 8%; NIO, up more than 5%; Xiaopeng Motors, WeRide, Synnex, and Daqo New Energy all up over 4%; Bilibili up over 3%. On the downside, Melco International Entertainment fell over 5%.

Oil prices saw some easing of the rally, with Brent crude futures settling Wednesday at $81.40 per barrel, unchanged from Tuesday, the highest level since January 2025. Among U.S. energy stocks, ExxonMobil and Chevron declined over 1%, ConocoPhillips fell over 2%, Schlumberger down over 1%, and Western Oil dropped 0.15%.

U.S. ADP Employment Increase of 63,000 in February

Strong economic data released Wednesday also boosted U.S. investor sentiment.

Automatic Data Processing (ADP) reported on Wednesday that private sector employment in the U.S. in February increased by 63,000, surpassing market expectations of 50,000. The previous figure was revised down from 22,000 to 11,000.

Despite exceeding expectations in total, the breadth of employment remains limited, with new jobs highly concentrated in two major sectors. Healthcare and education added 58,000 jobs in February, and construction contributed 19,000 jobs, significantly outpacing other sectors.

Nela Richardson, Chief Economist at ADP, said, “Hiring has picked up, and wage growth remains steady, especially among retained workers. However, job gains are concentrated in a few sectors, indicating that job switching no longer offers widespread wage advantages.”

Following the ADP report, the U.S. Bureau of Labor Statistics will release the non-farm payrolls report this Friday. Market expectations are for an increase of 50,000 jobs in February. Unlike ADP, this report includes government hiring. Economists expect the unemployment rate to remain steady at 4.3%.

Recent statements from Federal Reserve officials suggest increased confidence that the employment situation is stabilizing. Meanwhile, concerns about rising oil prices fueling inflation are also growing. According to CME FedWatch, traders currently expect the Fed to cut interest rates no earlier than July, with the probability of two rate cuts this year decreasing.

Federal Reserve Beige Book: Most Regions Experience Moderate Economic Growth

On March 4th, the Federal Reserve released its latest Beige Book, a report on the U.S. economy. The Fed publishes this report eight times a year, based on regional reserve bank surveys across the country. It serves as an important reference for monetary policy meetings.

The latest Beige Book indicates that in recent weeks, economic activity in most regions has grown at a slight to moderate pace, but an increasing number of regions report flat or declining activity. Out of the twelve Federal Reserve districts, seven experienced slight to moderate growth, while the number reporting flat or declining activity increased from four to five compared to the previous report.

The Fed noted that overall consumer spending has increased slightly, but two districts reported continued declines. Many districts cited increased economic uncertainty, rising prices, and reduced spending by low-income consumers, which suppressed sales. Storm-affected districts reported a slowdown in retail foot traffic; one district mentioned that immigration enforcement activities negatively impacted customer demand in urban areas.

The Beige Book states that employment levels remain generally stable, even as some businesses seek to improve efficiency through artificial intelligence. Several districts and industries have begun adopting AI or automation to boost productivity, with most companies emphasizing efficiency gains rather than job replacement.

This report was compiled by the Cleveland Fed based on information up to February 23rd, prior to the escalation of tensions in the Middle East and the surge in oil prices.