The rhetoric, which began late Tuesday and continued into Friday, interrupted stocks’ march higher and cracked the calm that has enveloped the market for months.
On Thursday, New York Fed President William Dudley said he expects sluggish US inflation to rise over the next several months while the hot labor market gets even hotter.
“It reinforces market concerns that inflation is perhaps just not picking up in the way the Fed had been expecting”, said Osborne. The index had its biggest drop since mid-May a day earlier. The Dow slumped 204.69 points or 0.9% to 21,844.01, the Nasdaq plummeted 135.46 points or 2.1% to 6,216.87 and the S&P 500 tumbled 35.81 points or 1.5% to 2,438.21.
The Nasdaq Composite Index climbed 39.68 points, or 0.6%, to close at 6,256.56. South Korea’s Kospi lost 1.7 percent, while Hong Kong’s Hang Seng slid 2 percent. It has been the leading S&P gainer so far this year, making it particularly vulnerable to a decline.
European bourses also looked set to open lower across the board, with Eurostoxx 50 futures already down 0.7 percent in early trade.
He added, “I will tell you this, North Korea better get their act together or they’re going to be in trouble like few nations ever have been in trouble in this world”.
The S&P 500 index had its biggest one-day drop in nearly three months on Thursday (Aug 10) as investors fled riskier assets, with technology stocks leading the charge, in response to an increasingly aggressive exchange of threats between the United States and North Korea.
President Trump says North Korea has “disrespected our country greatly”, adding his “fire & fury” warning “wasn’t tough enough“.
A spokesman for the Korean People’s Army said in a statement on Wednesday it was “carefully examining” plans for a missile attack on the U.S. Pacific territory of Guam, which has a large U.S. military base.
Amid the hot rhetoric, US stocks sold off sharply on Thursday, with the S&P 500 falling more than 1 percent. It’s still the highest it’s been since May.
The Labor Department said its consumer price index inched up by 0.1% in July after coming in unchanged in June. The low rates have been in recent years one of the fuels of the stock market.
The North Korea situation isn’t the only thing weighing on stocks. Humana rose $4.74, or 1.9 percent, to $254.96.
USA crude was unchanged at $48.59 per barrel and Brent was last at $51.84, down 1.63 percent on the day. Seagate shares rose 74 cents to $32.29. Higher interest rates can help boost banks’ revenue from loans. Viacom slid 60 cents, or 1.9 percent, to $30.17. The stock lost 89 cents to $3.82. Gold rose 1.2 per cent, while the Swiss franc was on track to post its biggest single day rise in about two-and-a-half years.
ENERGY: Benchmark U.S. crude gained 28 cents to $49.84 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the worldwide standard, lost 23 cents to $52.14 in London.