Wednesday, 9 August 2017
Geopolitical tensions weigh on Wall Street indexes
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Wall Street
US equity index futures pointed to a lower open on Wednesday, with market participants keeping an eye on further economic reports and geopolitical tensions in the Korean peninsula.
Tensions in the region built up following comments from President Donald Trump on Tuesday assuring the US would respond to any threat with “fire and fury”.
In response, Pyongyang said it is “carefully examining” a possible missile attack on Guam, an unincorporated territory of the United States in the western Pacific Ocean.
Geopolitical tensions create uncertainty among investors, which promotes profit taking and demand for safe-haven assets, while adding pressure to the US dollar.
The US dollar index, which tracks the greenback against a basket of six major rivals, was trading at 93.50 as of 08:25 GMT, easing 0.02 percent.
Overnight, US stock indexes settled to the downside in the light of a spoilt political scene. However, analysts said tensions could be seen as an opportunity for investors, offering a new direction to markets depending on the intensity of the conflict itself.
The Dow Jones industrial average ended 33 points to the downside at 22,085.34. The S&P 500 was down 0.24 percent at 2,474.92, while the tech-heavy Nasdaq composite fell 0.21 percent.
- Dow Jones Industrial Average: -33.08 / -0.15% / 22085.34
- Standard & Poor’s 500: -5.99 / -0.24% / 2474.92
- Nasdaq Composite: -13.31 / -0.21% / 6370.46
The CBOE Volatility Index, commonly mentioned as VIX, one of the best measures of fear in the market, increased 11 percent to 11.02 in the previous session.
On the earnings front, retail companies such as Michael Kors and Ralph Lauren reported better-than-expected earnings on Tuesday, rising 21.5 percent and 13.3 percent respectively.
Disney presented earnings after the closing bell, missing expectations in media and networks and consumer and interactive segments.
Ahead in the session, traders will be paying attention to Q2 unit labor costs and nonfarm productivity, both due at 12:30 GMT, with a 0.7 percent and 1.2 percent build seen.
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