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US Stocks Edge Lower as North Korea-US Rhetoric Escalates, Tech Stocks Sell-Off

1:15 PM, Sep 25, 2017 — US equity benchmarks were firmly in negative territory in recent trade on Monday as an escalation in rhetoric between North Korea and the US ratcheted up and the technology sector experienced a sell-off.

North Korea’s foreign minister, Ri Yong Ho, told reporters gathered outside a hotel in New York on Monday that US President Donald Trump had “declared war” on North Korea, according to a news report from Reuters. “The whole world should clearly remember it was the US who first declared war on our country,” Ri was quoted by Reuters news agency as saying on Monday. “Since the United States declared war on our country, we will have every right to make countermeasures, including the right to shoot down United States strategic bombers even when they are not inside the airspace border of our country,” Reuters additionally quoted Ri as saying.

The reported comments come after US President Donald Trump issued a Tweet on Saturday saying that “If he [Ri Yong Ho] echoes thoughts of Little Rocket Man, they won’t be around much longer.” That Tweet came after Ri delivered a speech at the United Nations (UN) in which he criticized a speech made my Trump the previous week for having “reckless and violent words” and said that Trump “committed an irreversible mistake of making our rockets’ visit to the entire US mainland inevitable all the more”.

In economic news, the closely-watched Chicago Fed National Activity Index, a weighted average of 85 existing monthly indicators of national economic activity, slid to -0.31 in August from a revised reading of 0.03 in July, missing expectations for +0.11.

Separately, William Dudley, president of the Federal Reserve Bank of New York, indicated that inflation would likely rise and said that the US is on a trajectory of slightly above trend growth. “With a firmer import price trend and the fading of effects from a number of temporary, idiosyncratic factors, I expect inflation will rise and stabilize around the FOMC’s [Federal Open Market Committee’s] 2% objective over the medium term. In response, the Federal Reserve will likely continue to remove monetary policy accommodation gradually,” he said in a speech delivered in Syracuse, New York. Dudley’s comments come less than a week after the FOMC concluded its September rate-setting meeting at which it elected to hold its benchmark interest rate unchanged.

In equities, Facebook (FB), Apple (AAPL) and Alphabet (GOOG) were down by 3.8%, 0.7% and 1.5%, respectively, at the time of writing. Traders are also eyeing a raft of upcoming data due to be published later in the week. Durable goods and consumer spending figures will be released in the coming days.

The Dow Jones Industrial Average was 0.37% lower, the Standard & Poor’s 500 was down by 0.35% and the Nasdaq was 1.04% lower at the time of writing.

Companies: Apple Inc.
Price: 150.79 Price Change: -1.10 Percent Change: -0.72