North Korea, hurricanes rattle Wall Street
Escalating tensions on the Korean peninsula rattled nerves on Wall Street Tuesday, leading to the stock market’s worst day in almost three weeks.
Bank stocks led the slide as bond yields slumped. Tech, the biggest gainers this year, also pulled the market lower. Energy companies climbed the most as the price of crude oil rose.
Traders also bid up shares in traditional safehaven investments such as utilities and gold, which climbed to the highest level in more than a year.
“Today the risk-off trade really is North Korea front and center,” said Jeff Zipper, managing director of investments at U.S. Bank Private Wealth Management. “Also, you have the hurricane last week and the upcoming hurricane, so there’s a lot on the plate for the market to digest.”
Stocks were coming off back-to-back weekly gains as investors returned from the Labor Day holiday weekend to heightened tensions between the U.S. and North Korea.
The VIX, a measure of how much volatility investors expect in stocks, jumped 20.7 percent to 12.23. Gold rose $14.10, or 1.1 percent, to $1,344.50 an ounce.
Shares in cruise line operators fell as Hurricane Irma roared toward islands in the northeast Caribbean. The Category 5 storm, the most powerful seen in the Atlantic in over a decade, was on a path that could eventually take it to the U.S.