US Market Lower as Geopolitical Tensions Rise

U.S. stocks edged lower on Tuesday as rising geopolitical tensions in the Middle East and the Korean peninsula pushed investors to safe-haven assets such as gold.

The White House said on Monday President Donald Trump was open to authorizing additional strikes on Syria if its government uses chemical weapons again or deploys barrel bombs, while North Korea warned of a nuclear attack on the United States if provoked as a U.S. Navy strike group moved towards the western Pacific.

Prices of safe-haven gold rose, with spot gold XAU= up the most in over two weeks. Investors also ditched riskier assets for the Japanese yen and U.S. Treasuries.

The dollar index .DXY slipped by the most in about two weeks and oil prices eased from five-week highs.

“Heightening geopolitical fears are likely to constrain investors from a mood change…(and) are likely to keep the safety trade, gold and U.S. Treasuries, in play,” Peter Cardillo, chief market economist at First Standard Financial wrote in a note.

At 9:42 a.m. ET (1342 GMT), the Dow Jones Industrial Average .DJI was down 52.2 points, or 0.25 percent, at 20,605.82, the S&P 500 .SPX was down 9.26 points, or 0.39 percent, at 2,347.9 and the Nasdaq Composite .IXIC was down 22.45 points, or 0.38 percent, at 5,858.47.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza