At the start of the year, Korea's stock market has stayed in record-breaking bull territory as the KOSPI topped 5,000 points and the KOSDAQ regained the "Cheon-SDAQ" milestone for the first time in four years. But internal and external conditions still carry risks. Geopolitical uncertainty is spreading in Iran, and concerns about a U.S. government shutdown at the end of this month have grown again.
On the 24th (local time), in Minneapolis, Minnesota, a U.S. man who worked as an ICU nurse at a local veterans hospital died after being shot by Immigration and Customs Enforcement (ICE) agents. It was the second such case after a U.S. female citizen was shot and killed by ICE agents on the 7th. As distrust of ICE and the federal government's immigration enforcement policies has grown across the United States day after day, this shooting has reignited anger.
On the 23rd, the U.S. House approved the Department of Homeland Security appropriations bill, one of the last four bills for the fiscal year 2026 budget plan, but after the shooting, Senate Democrats are pushing back hard, saying the issue should be a condition in negotiations to approve the budget and that ICE funding should be limited.
According to the prediction platform Polymarket, the probability of a shutdown at the end of this month, which had been below 10%, has risen to around 80%. For a bill to pass the Senate, it must secure 60 votes, but Republicans hold 53 seats, making at least seven additional votes essential.
In the fourth quarter last year, the longest shutdown continued, delaying the release of key economic indicators and increasing monetary policy uncertainty. Concerns are being raised that the same situation could be repeated if a shutdown occurs this time as well.
Fortunately, analysis suggests the impact on the domestic stock market will be limited. Ha Jang-kwon, an analyst at Hyundai Motor Securities, said, "The Republican side is currently considering separating out the problematic Department of Homeland Security (DHS) portion and passing the rest," adding, "As that scenario is the most likely to unfold, the impact on the stock market in that case would be extremely limited."
With the Jan. 27–28 Federal Open Market Committee (FOMC) meeting and earnings releases from big tech corporations such as Microsoft (MS), Apple, Meta and Tesla approaching, the escalating tensions between the United States and Iran are another variable. As the United States hinted at possible military intervention over Iran's bloody suppression of protesters, a U.S. aircraft carrier strike group has reportedly entered the Indian Ocean.
Iran ranks about third compared with Venezuela, which is No. 1 in oil reserves, but its oil production is three times that of Venezuela. Because of this, the U.S. government may find it harder to respond as aggressively to the current conflict with Iran as it did with Venezuela.
Analyst Ha said, "Iran is geographically in the Middle East, so supply risks could be highlighted if things go wrong," adding, "The political backdrops of the Venezuela and Iran situations are different, but looking only from the oil price perspective, from Trump's standpoint, a clash with Iran will not become full-scale."