Stocks fell Thursday after President Donald Trump called off the June 12 summit with North Korea, adding to geopolitical concern.
Trump said the meeting was off because of the “tremendous anger and open hostility” displayed in a recent statement from leader Kim Jong Un.
The Dow Jones Industrial Average decreased 75.05 to 24,811.76. The S&P 500 dropped 5.53 points to 2,727.76. The Nasdaq Composite slipped 1.53 points to 7,424.43.
Prior to the news, stocks were little changed as investors digested economic data and trade developments.
On Wednesday, U.S. stocks erased early losses and closed higher after minutes from the Federal Reserve's May 1-2 meeting showed the central bank planned to stay on a gradual path of rate increases even if inflation meets its target. Worries about the Fed raising rates faster than expected have buoyed Treasury yields and the dollar lately, contributing to swings in stocks.
|I:DJI||DOW JONES AVERAGES||33587.66||-681.50||-1.99%|
|I:COMP||NASDAQ COMPOSITE INDEX||13031.680793||-357.75||-2.67%|
Adding to investor concern, the Trump administration confirmed on Wednesday that it may slap tariffs on imported vehicles and automotive parts, pending the outcome of an investigation by the Department of Commerce.
“If the president is playing to voters in the Rust Belt, I'm not sure they will see auto tariffs as helpful since many auto workers are employed by Toyota, Honda,” said Albert Brenner, director of asset allocation strategy at People's United Wealth Management.
“As for market reaction, the sell-off yesterday in auto stocks is an early indication,” added Brenner. “Anything that smacks of a trade war will unsettle the market and keep it from moving higher. More than 30% of global GDP is attributable to foreign trade.”
Data released Thursday included weekly jobless claims, which rose to a seven-week high of 234,000. The latest reading on housing showed a big slip in existing home sales because of a supply pinch. In the Fed minutes, members of the central bank's policy-making committee indicated that another increase in interest rates would be warranted soon, likely in June.
The geopolitical uncertainty was good for the safe-haven commodity gold. After the yellow metal recently slumped to its lowest price of the year, it was up on Thursday, crossing above $1,300 per ounce. Oil futures were lower.