The United States stock index finished lower than usual after Donald Trump canceled his meeting with Kim Jong Un. The entire market dropped after the announcement, but energy companies whose stock fell the most managed to recover the largest part of their losses.
The drop in energy companies and oil futures happened because the market reacted to the news that OPEC nations might start to produce more oil. Rates edged down, and because of this banks fell, and they were followed with car industry when Toyota and Fiat Chrysler fell after POTUS announced tariffs on imported cars and car parts. Similarly to other Trump moves in recent weeks, this statement was followed by disagreement from China, Japan, and European Union.
One of the stock market indexes that took the biggest hit was Dow Jones Industrial that fell for 280 points, and additional 1% after Trump announced that Singapore summit is off. The reason for cancellation, according to POTUS, is the “tremendous anger and open hostility” shown by North Korea in their most recent statement released to the press.
Another segment that went down heavily, and it was one of the biggest in recent years, is technology sector. At the same time, defense contractors climbed. This always happens when the nuclear threats become a theme in the news. The market started recovering right after Mr. Trump said that summit could happen in June, or at a later date. At the end of the day, stocks were slightly lower from the spot they were before the Trump’s announcement.
Chris Zaccarelli, chief investment officer for the Independent Advisor Alliance, said that stockbrokers were more alarmed by threats of nuclear war exchanged between Trump and Kim in the past than they are now. Because of this, when nuclear weapons are mentioned, the market doesn’t react panically as it did in past years. Zaccarelli said: “The first time the market hears these threats, there’s a large reaction, and after that, there’s less reaction. It’s just rhetoric right now, and there’s no actual military conflict, [so] these moves are kind of short-lived.”