Wall Street opened lower on Tuesday as investors remained cautious after North Korea conducted its most powerful nuclear test over the weekend.
North Korea on Sunday conducted its sixth nuclear test, which it said was of an advanced hydrogen bomb for a long-range missile, marking a dramatic escalation of the regime’s stand-off with the United States and its allies, reports Reuters.
The United States blamed North Korea’s trading partners on Monday of aiding its nuclear ambitions and the White House declared that “all options to address the North Korean threat are on the table.”
“We see no panic in the market just as yet, it feels like it is the calm before the storm and investors are being somewhat cautious,” said Peter Cardillo, chief market economist at First Standard Financial in New York.
Equity markets have shown resilience to geopolitical events surrounding North Korea of late, with initial losses erased relatively quickly. Safe-haven gold pulled back from a one-year high in its first drop in four days.
At 9:39 a.m. ET (1339 GMT), the Dow Jones Industrial Average was down 99.19 points, or 0.45 percent, at 21,888.37 and the S&P 500 was down 8.52 points, or 0.34 percent, at 2,468.03. The Nasdaq Composite was down 25.29 points, or 0.39 percent, at 6,410.04.
Nine of the 11 major S&P sectors were lower, with financial index’s percent leading the decliners. Bank of America and Goldman Sachs were down more than 1.5 percent.
Federal Reserve Governor Lael Brainard, an influential policymaker, said U.S. inflation is falling “well short” of the target so the central bank should be cautious about raising interest rates any further until it is confident that prices are headed higher.
Minneapolis Fed President Neel Kashkari and his Dallas counterpart, Robert Kaplan, are also slated to speak at different events later in the day.
Economic data for the day includes a report from the Commerce Department that will likely show factory goods orders fell 3.3 percent in July, compared with a rise of 3.0 percent in the previous month. The data is due at 10:00 a.m. ET.
Shares of United Technologies were down about 3 percent and were the biggest drag on the Dow after the company struck a $30 billion deal to buy avionics and interiors maker Rockwell Collins. Rockwell shares were up 1.39 percent.
Insmed shares more than doubled to $28.30 after the company said its drug for the treatment of a rare and serious lung disorder met the main goal in a late-stage study.