U.S. stocks suffer amid tensions over North Korea
U.S. stocks closed slightly higher Friday but still suffered one of their worst weeks in months amid nuclear-fueled tension and threats between the United States and North Korea.
The Dow Jones industrial average, S&P 500 index and Nasdaq ended the day with less than 1% gains as President Trump issued new warnings to the North Korean government of Kim Jong Un.
The Dow closed up 0.7% at 21,858.32, the S&P rose 0.13% to 2,441.32 and the Nasdaq composite closed up 0.64% at 6256.56.
The outcomes represent the year’s second-worst weekly financial performance of the Dow and S&P, and the third-worst for Nasdaq. Many financial analysts blamed the results on financial market uncertainty over the U.S.North Korean blustering.
“The war of words between Donald Trump and North Korean officials has stepped up in recent days and has put investors on edge, prompting a more riskaverse approach in the markets,” Oanda senior market analyst Craig Erlam said in a note to investors.
“The weekend brings an undefined amount of risk for investors, with the potential for circumstances to escalate both dramatically and unexpectedly at a time when markets are closed,” Erlam said.
Friday, Trump continued his tough talk on North Korea, tweeting, “Military solutions are now fully in place, locked and loaded, should North Korea act unwisely.”
In contrast, the decades-long foes have continued quiet backchannel diplomacy over their deteriorating relations and the issue of Americans jailed in the communist nation, the Associated Press reported.
Strategas analyst Chris Verrone suggested that the market’s overall strength in recent weeks could represent another rationale for the downbeat weekly performance.
“While it’s easy to look to geopolitical tension as the catalyst for Wednesday’s reversal and Thursday’s weakness, this is a market that has been leaking momentum for much of the summer,” Verrone said in a note to investors.