Trump's North Korea move sees Wall Street slide

Trump's North Korea move sees Wall Street slide

NYSE May24
Traders work on the floor of the New York Stock Exchange. (AP Photo/Richard Drew)

NEW YORK: A volatile day on Wall Street saw US stocks swing to a negative finish after US President Donald Trump cancelled a planned June summit with North Korean leader Kim Jong Un.

The major indices rebounded off the day's lows but were still negative due to falling oil prices and persistent trade jitters after Trump late on Wednesday announced a national security investigation into auto imports.

Trump called off the North Korea meeting, citing Pyongyang's purported "open hostility."

The Dow Jones Industrial Average fell 75.05 points (0.30 per cent) to close at 24,811.76 while the S&P gave up 5.53 points (0.20 per cent) to settle at 2,727.76.

The tech-heavy Nasdaq lost 1.53 points (0.02 per cent) to 7,424.43.

"There are two cases on which the market is really focused. It's trade negotiations and the geopolitical situation with North Korea," Tom Cahill of Ventura Wealth Management told AFP.

"Donald Trump just backed down on both."

After suffering an initial shock, stocks recovered much of their losses. But Cahill said each day's lot of worrisome trade headlines could have a cumulative effect on the market.

"These conflicts are not dramatic one by one," he said. "But their accumulation will eventually undermine business confidence and growth."

The word of the national security auto investigation, which could result in fresh tariffs on foreign-made cars and auto parts, sent US automakers higher.

General Motors added 1.4 per cent while Ford rose 1.5 per cent.

But falling oil prices meant US supermajors Exxon Mobil and Chevron had a bad day, falling 2.3 per cent and 1.7 per cent, respectively.

Meanwhile, financial stocks lagged behind the market, with investors relieved the Federal Reserve seems less likely to accelerate the pace of interest rate increases.

Investment bank Goldman Sachs fell 0.7 per cent and JP Morgan Chase sank 1.1 per cent. 

Source: AFP/de