Stocks drop as global tensions keep traders on edge
Stocks fell Tuesday as geopolitical tensions kept Wall Street on edge.
The Dow dropped 120 points shortly after the open, with 3M contributing the most losses. The S&P 500 slipped 0.75 percent, with financials lagging. The Nasdaq declined 0.95 percent.
“It’s sort of surprising the market hasn’t reacted more negatively given the geopolitical tensions,” said Nick Raich, CEO of The Earnings Scout. He also noted investors are taking a “wait-and-see” attitude as earnings season begins. JPMorgan Chase, Citigroup and Wells Fargo are among the companies set to report this week.
Traditional safe-havens caught a bid early on Tuesday. Gold futures for June delivery rose 1.1 percent to $1,267.90 per ounce, while the benchmark 10-year note yield slipped to 2.328 percent.
The CBOE Volatility Index rose more than 10 percent to 15.5.
Secretary of State Rex Tillerson said Tuesday the U.S. will stand up against anyone who commits crimes against humanity.
“We rededicate ourselves to holding to account any and all who commit crimes against the innocents anywhere in the world,” Tillerson told reporters before heading to Moscow, where he and Russian officials are expected to discuss last week’s suspected chemical attack in Syria.
The U.S. responded by launching 59 Tomahawk missiles at a Syrian airfield. But the Trump administration is also navigating through rising tensions with North Korea.
On Saturday, a U.S. official told Reuters that a U.S. Navy strike group will be moving close to the Korean peninsula as a show of force.
President Donald Trump tweeted Tuesday: “North Korea is looking for trouble. If China decides to help, that would be great. If not, we will solve the problem without them! U.S.A.”
On the economic data front, the NFIB small business optimism index slipped to 104.7 in March from 105.3 in February, but the uncertainty index hit its second-highest level in history.
“This just underscores that clarity on fiscal spending and taxes will be the catalyst that gets markets going. The clock is running but apparently no one is paying attention,” Michael Block, chief strategist at Rhino Trading Partners, said in a note.
Reuters contributed to this report.