Kospi plunges 8,4% today after Iran attack, increasing risk aversion.

• Iran-Israel conflict increases global risk aversion.
• Wall Street futures retreat after missile attack.
• US inflation and SpaceX IPO come into focus.

Financial markets began the week under pressure following reports that Iran launched missiles against Israel, raising concerns about the stability of the ceasefire in the region and increasing caution among global investors.

Futures contracts for major U.S. exchanges fell in Sunday night trading. Futures linked to the Dow Jones Industrial Average declined by about 0,2%, while contracts for the S&P 500 and Nasdaq 100 also showed losses of the same proportion.

The negative reaction quickly spread to Asia. In South Korea, the Kospi index led the losses among the region's major markets, plunging 8,4%. In Japan, the Nikkei 225 fell 3,4%, reflecting the increased search for safe haven assets amid escalating geopolitical tensions.

The latest episode involving Iran and Israel has brought back doubts about the durability of the agreements that had been reducing recent conflicts. The missile launch occurred after a post on the X network by MB Ghalibaf, president of the Iranian Parliament, who accused the United States of violating commitments related to the ceasefire and agreements involving Lebanon.

The environment was already fragile following the sharp correction seen on Wall Street last Friday. The Nasdaq recorded its worst session since April 2025, while the S&P 500 ended the day with a significant drop. The Dow Jones also suffered significant losses, closing the session hundreds of points below its previous record high.

Part of the pressure came after the release of US employment data that exceeded market expectations. The result boosted yields on US Treasury bonds and reinforced concerns about the possibility of high interest rates remaining for longer.

According to Callie Cox, chief market strategist at Ritholtz Wealth Management, the recent performance of stocks may be creating additional challenges for investors. "The stock market may be becoming a victim of its own success," she said. "The labor market has recovered, but the threat of persistently high inflation seems to be the risk looming on everyone's mind."

She added: “Growth and dynamism have surpassed almost everything since the March lows.” “This is not what one would expect in an environment of high interest rates and high inflation, and these strategies may be subject to disappointment if cost pressures remain high.”

Throughout the week, investors will be closely monitoring data from the Consumer Price Index (CPI) and the Producer Price Index (PPI), considered important indicators for measuring the trajectory of inflation in the United States. Also on the radar is the highly anticipated initial public offering of Elon Musk's SpaceX, touted as one of the biggest debuts in Wall Street history.

“Highly successful initial public offerings (IPOs) have marked the peak of excess in past market cycles, so there seems to be an awkward silence about what this might signal for market sentiment,” Cox said. “Many investors seem restrained and skeptical, but can that temperament exist when the biggest IPO of all time is about to happen?”