Gold jumps to almost one-year high
Continue Reading Below
U.S. stock futures were trading firmly lower on Tuesday, after a North Korean missile test over Japanese airspace rattled investors and sent them searching for assets perceived more safe than stocks.
Futures for the Dow Jones Industrial Average slumped 125 points, or 0.6%, to 21,666, while those for the S&P 500 index lost 19.20 points, or 0.8%, to 2,424.50. Futures for the Nasdaq-100 index were down 57 points, or 1%, at 5,791.
The stock-index futures already started heading lower late Monday in New York after North Korea launched a ballistic missile over Japan, seen as another direct provocation that could destabilize the region (http://www.marketwatch.com/story/north-koreas-outrageous-missile-launch-over-japan-inflames-tensions-again-2017-08-29).
Japanese Prime Minister Shinzo Abe called the missile test an "unprecedented, grave and serious threat that seriously damages peace and security in the region."
U.S. President Donald Trump has previously said the U.S. would react with "fire and fury" if Pyongyang stepped up threats against the U.S. and its allies.
Continue Reading Below
"[The missile launch] has impacted financial markets, with risk appetite being hit," said Richard Perry, market analyst at Hantec Markets, in a note. "The main safe haven trades, such as gold, U.S. Treasuries and the yen have all strengthened, whilst the U.S. dollar and equities have been casualties."
"Exactly how Trump responds to this threat could be crucial to the sustainability of key breaks on the likes of gold, which has broken above major resistance at $1,310 this morning," he added.
Gold jumped $15.10, or 1.2%, to $1,330.70 an ounce, trading around the highest level since September. In other haven trading, the yield on 10-year U.S. Treasury notes fell 6 basis points to 2.097%, falling below 2.10% for the first time since November.
Meanwhile, the ICE Dollar Index slid 0.5% to 91.788, its lowest since January 2015. The greenback fell to Yen108.46, compared with Yen109.26 late Monday in New York.
The dollar also suffered under uncertainty of how the devastating Hurricane Harvey that rampaged Texas over the weekend will hit the U.S. economy and impact the Federal Reserve rate decisions. The storm system is expected to make landfall again this week (http://www.marketwatch.com/story/harvey-set-to-pummel-flooded-houston-once-again-2017-08-29) and to add another 20 inches of rain for an total of 50 inches.
"The knock-on effects suggest dampened 3Q17 U.S. growth that may see the Fed deciding against raising interest rates again in 2017. While this may be too early to call, we do expect this thinking to weigh on the dollar in the near-term," said analysts at ING in a note.
ReadCaroline Baum: No, hurricanes are not good for the economy (http://www.marketwatch.com/story/no-hurricanes-are-not-good-for-the-economy-2017-08-28)
And see:Hurricane Harvey highlights biggest impact of shale-oil revolution
Gas prices continued higher, with the October contract up 0.3% on Tuesday to $1.58 a gallon. Crude oil prices gained 0.7% to $46.91 a barrel.
(END) Dow Jones Newswires
August 29, 2017 04:48 ET (08:48 GMT)