U.S. stocks fell as selling in large-cap technology shares intensified, while Treasuries advanced with gold after North Korea ratcheted up tensions with America.
The Nasdaq 100 Index posted its steepest loss in five weeks, with the FANG cohort of megacaps leading declines. Small-cap shares fared better as investors continued to rotate into the year’s laggards. Haven assets advanced after North Korean Foreign Minister Ri Yong-Ho described President Donald Trump’s recent comments as tantamount to a declaration of war.
“Without a doubt, North Korea is hovering over the market, but it sort of zigs and zags onto the scene,” said Quincy Krosby, chief market strategist at Prudential Financial Inc. “What you are seeing is those tech names pulling back. The fact is that right now, you have a fully valued market and little catalysts at this point to push the market higher. ”
Ri, speaking in New York Monday, also declared that North Korea can shoot down U.S. warplanes as part of its right to self-defense under the United Nations charter, adding to weeks of rhetoric that has intermittently rattled financial markets. U.S. markets also kept an eye on the latest domestic political developments, with the most recent effort to overhaul the health-care system on life support and a Republican tax proposal still lacking details.
Elections dominated trading overseas. The Stoxx Europe 600 Index climbed, and the euro weakened after Chancellor Angela Merkel won Germany’s election, while the country’s main far-right party had a surprisingly strong result. The process of building a new government could take weeks, so markets may well move on from the result quickly.
“Investors were expecting a victory for Angela Merkel, but there has been a surprise in the relatively poor performance of the CDU and SPD, who suffered their worst results since 1949,” Nick Peters, multi asset portfolio manager at Fidelity International, wrote in a note.
The yen stayed weaker as Japan’s prime minister unveiled a fresh stimulus package and said he’ll dissolve the lower house of parliament ahead of a general election. Most government bonds advanced.
The Nasdaq 100 Index posted its steepest loss in five weeks, with the FANG cohort of megacaps leading declines. Small-cap shares fared better as investors continued to rotate into the year’s laggards. Haven assets advanced after North Korean Foreign Minister Ri Yong-Ho described President Donald Trump’s recent comments as tantamount to a declaration of war.
“Without a doubt, North Korea is hovering over the market, but it sort of zigs and zags onto the scene,” said Quincy Krosby, chief market strategist at Prudential Financial Inc. “What you are seeing is those tech names pulling back. The fact is that right now, you have a fully valued market and little catalysts at this point to push the market higher. ”
Ri, speaking in New York Monday, also declared that North Korea can shoot down U.S. warplanes as part of its right to self-defense under the United Nations charter, adding to weeks of rhetoric that has intermittently rattled financial markets. U.S. markets also kept an eye on the latest domestic political developments, with the most recent effort to overhaul the health-care system on life support and a Republican tax proposal still lacking details.
Elections dominated trading overseas. The Stoxx Europe 600 Index climbed, and the euro weakened after Chancellor Angela Merkel won Germany’s election, while the country’s main far-right party had a surprisingly strong result. The process of building a new government could take weeks, so markets may well move on from the result quickly.
“Investors were expecting a victory for Angela Merkel, but there has been a surprise in the relatively poor performance of the CDU and SPD, who suffered their worst results since 1949,” Nick Peters, multi asset portfolio manager at Fidelity International, wrote in a note.
The yen stayed weaker as Japan’s prime minister unveiled a fresh stimulus package and said he’ll dissolve the lower house of parliament ahead of a general election. Most government bonds advanced.
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