US stocks came off session lows on Tuesday, but the S&P 500 was still on track for its worst day in three weeks amid mounting geopolitical tensions. The White House said on Monday President Donald Trump was open to authorizing additional strikes on Syria if its government uses chemical weapons again or deploys barrel bombs. Trump ordered a missile strike on the war-torn country last week as a response to what his administration said was a poison gas attack, pitting the United States against Russia, which backs Syrian President Bashar-al-Assad. Adding to the dour mood, North Korea state media warned of a nuclear attack on the United States if provoked as a US Navy strike group moved toward the western Pacific.
Prices of spot gold jumped to their highest since November. Demand for US Treasuries and the Japanese yen also rose. The dollar index softened, while oil prices eased from five-week highs. At 12:27 pm ET (1627 GMT), the Dow Jones Industrial Average was down 47.11 points, or 0.23 percent, at 20,610.91, theS&P 500 was down 9.88 points, or 0.42 percent, at 2,347.28 and the Nasdaq Composite was down 28.49 points, or 0.48 percent, at 5,852.44. However, Trump’s comments during a meeting with chief executives of US companies helped the market recoup some losses.
Trump said his administration was working to reduce regulations and revamp the Dodd-Frank law, which may be eliminated and replaced with “something else.” The tailwinds for the market are fundamentals and the hope of pro-growth policy, while the negatives are the unpredictability of geopolitical risks, said Art Hogan, chief market strategist at Wunderlich Equity Capital Markets in New York.
Ten of the eleven major S&P 500 sectors were lower. The financial sector was the biggest loser, with a 0.83 percent decline. Banks, which are scheduled to start reporting quarterly earnings this week, were the top drags.
Technology sector’s 0.7 percent decline was largely due to a 1 percent fall in Apple. The iPhone maker was also the biggest drag on the three main indexes. Real estate – considered a defensive play of the broader index – was the outlier. Utilities and consumer staples, the other defensive sectors, fell the least.
The CBOE Volatility index, also called Wall Street’s “fear gauge”, shot up to its highest level in five months. Thursday will be the last trading day of the week on Wall Street ahead of the Good Friday holiday.
Shares of United Continental dropped 2.6 percent after a worldwide backlash erupted against the carrier over a passenger who was dragged off one of its US flights. Online coupon provider RetailMeNot jumped nearly 50 percent to $11.55 after agreeing to be bought by marketing services company Harland Clarke.
Walt Disney rose 0.6 percent after being added to Goldman Sachs’ conviction list. Declining issues outnumbered advancers on the NYSE by 1,473 to 1,380. On the Nasdaq, 1,391 issues rose and 1,353 fell. The S&P 500 index showed four 52-week highs and one low, while the Nasdaq recorded 41 highs and 38 lows.