Wall Street closes lower on risk aversion
After starting the day on a high note, major equity indexes in the U.S. reversed course in the late NA session and closed the day lower after US President Trump's comments pushed investors away from riskier assets.
A recent article by the Washington Post claimed that a report by U.S. intelligence officials concluded that North Korea has produced nuclear weapons for ballistic missile delivery, to include delivery by ICBM-class missiles. Following this development, US President Trump crossed the wires, saying "if North Korea escalates nuclear threat, they will be met with fire and fury like the world has never seen." CBOE Volatility Index jumped to a fresh monthly high, suggesting that investors started seeking refuge.
"That's a foregone conclusion they might have this capability. That they'd actually use it has not been priced in. If we were threatened, the U.S. would take action and there'd be a Treasury rally," Brian Battle, director of trading at Performance Trust Capital Partners in Chicago, told Reuters.
The Dow Jones Industrial Average dropped 33.08 points, or 0.15%, to 22,085.34, the S&P 500 fell 5 points, or 0.2%, to 2,472.50 and the Nasdaq Composite lost 13.31 points, or 0.21%, to 6,370.46.
Earlier in the session, gains in Apple, which pushed its shares to a record high with a gain of nearly 2%, was the primary fuel of the major indexes.
Headlines from the U.S. session:
- CBOE Volatility Index spikes higher after Trump comments - Reuters
- Small business optimism rebounds in July - Wells Fargo
- North Korea successfully produced miniaturized nuclear warhead - Washington Post
- Fed not to hike until December, but wages set to rise - Scotiabank
- US: Job Openings at a record high - Wells Fargo
- N. Korea playing hard ball - UOB
- EIA forecasts 2017 US crude oil production to rise by 500,000 bpd - Reuters
- OPEC: Talks on compliance in Abu Dhabi will help facilitate full conformity with supply cut deal
- US Dollar jumps to weekly highs above 93.60
- US: Streak of economic optimism continues - IBD/TIPP Poll
- US: Job openings increase in June; hires and separations little changed