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Stocks slip as Trump calls off summit with North Korea

Thursday 24/May/2018 - 10:52 PM
Sada El Balad
Edited by Ahmed Moamar
Stocks fell Thursday after U.S. President Trump called off the June 12 summit with North Korea based on the “tremendous anger and open hostility” displayed in a recent
statement from leader Kim Jong Un، as Fox News said.
Prior to the news، stocks were flat with investors digesting the latest economic data while weighing the latest trade developments.
U.S. stocks erased early losses and closed higher after minutes from the Federal Reserve's latest meeting showed the central bank plans 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، and contributed to swings in stocks.
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، etc،” 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 snacks of a trade war will unsettle the market and keep it from moving higher. More than 30 percent of global GDP is attributable to foreign trade.”
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.
Data released Thursday included weekly jobless claims، which rose to a 7-week high of 234،000. The latest reading on home sales showed a big slip existing home-sales due to a supply pinch.
The geopolitical uncertainty was good for 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.

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