Wall Street pares gains as geopolitical tension remains high
After starting the day on a high note, major equity indexes in the U.S. struggled to build on their gains as the escalating tension between North Korea and the United States forced investors to take some profits off the table heading into the weekend.
Although today’s weaker-than-expected inflation growth data from the U.S. pushed the financials lower, the technology sector was able to offset the losses as the data also pointed towards a lower probability of a Fed rate hike, which is likely to keep the cost of borrowing low. S&P’s technology index .SPLRCT gained 0.75% while the bank sub-sector .SPXBK lost 0.7%.
On the other hand, late in the session, US President Donald Trump said that they were looking very carefully at military options against North Korea, triggering another flight-to-safety. “If earnings can stay strong and interest rates remain low, investors can look beyond North Korea and continue to rally equities,” Robert Phipps, a director at Per Stirling Capital Management in Austin, told Reuters.
The S&P 500 added 3 points, or 0.12%, to close at 2,440.50, but still recorded its biggest weekly loss since early April. The Dow Jones Industrial Average gained 14.31 points, or 0.07%, to 21,858.32 and the tech-heavy Nasdaq Composite rose 39.68 points, or 0.64%, to 6,256.56.
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