New York Stock Exchange, USA [EPA=Yonhap News]

Investor funds that were heading towards global markets are now flowing back into the United States in the aftermath of the war in Iran, according to a report by the U.S. daily Wall Street Journal (WSJ) on the 21st (local time).

Following the outbreak of the war at the end of February, overseas stock markets all saw declines. The U.S. was no exception, but the drop was relatively limited.

The MSCI World ex USA Index fell by about 10%, while the U.S. index only dropped by 5.4%. Germany's DAX index and Japan's Nikkei average stock price also declined by 11% and 9.3%, respectively.

The Korean stock market showed a similar trend. According to the Korea Exchange, the KOSPI fell by 7.41%.

The surge in oil prices was a major factor behind this trend.

The United States is the world's largest producer of oil and natural gas. It has a structure that can relatively absorb the shock of rising energy prices. Combined with solid corporate earnings, U.S. assets are re-emerging as a 'safe haven' in an increasingly uncertain market.

In contrast, energy importers, including South Korea, face increased cost burdens and a structure where investment attractiveness is relatively weakened.

The situation was different before the war. Europe and Asia attracted investors' interest based on expanded fiscal spending and relatively low valuations, and were also seen as alternative investment destinations to avoid concerns about overheating in AI-related stocks.

As a result, the global MSCI index surged by 29% last year, significantly outpacing the rise in U.S. stock prices (16%). This was the largest difference since 2009.

Rising oil prices and a strong dollar due to the Middle East war As the Iran war intensifies, oil prices and the dollar continue to strengthen. On the 19th, the status board at the dealing room of Hana Bank in Jung-gu, Seoul, displays the won/dollar exchange rate, which has soared to its highest level since the financial crisis, and the benchmark international oil prices, Brent crude and West Texas Intermediate (WTI). [Yonhap News]

In particular, according to the Korea Exchange, the KOSPI's growth rate last year was 75.6%, ranking first among G20 and OECD member countries.

Michael Rosen, Chief Investment Officer at Angeles Investments, told the WSJ that he had increased his investment in European and emerging markets at the beginning of the year, but changed his investment direction in less than two months.

"We are currently taking a very neutral stance and are closely watching how this situation will unfold," he added.

Michael Green, senior market strategist at Simplify Asset Management, cited South Korea as an example, arguing that there were not enough fundamentals to justify the previous strength of overseas stock markets.

Green pointed to South Korea's heavy reliance on natural gas imports and its proximity to North Korea.

"I don't think this movement is sustainable," he said.

However, it is unclear how long the current trend of U.S. outperformance will last.

The rise in energy prices is lowering expectations for interest rate cuts by the Federal Reserve (Fed), which was a major supporting factor for U.S. stocks. Some even suggest the possibility of interest rate hikes rather than cuts.

If the global economy slows down, it will be difficult for U.S. companies to avoid the impact, and concerns about defaults in the private credit loan market are also being raised due to lingering anxieties related to AI.