President Donald Trump’s threat that North Korea could face “fire and fury like the world has never seen” is rattling the U.S. stock market, where the so-called ” fear index” shot up more than 10 percent and stock prices slid downward.
The Dow Jones industrial average, which set closing records for nine consecutive trading sessions, quickly turned lower and ended in the red after Trump spoke to reporters about reports that North Korea developed a warhead capable of fitting atop a missile. The volatile regime is considered by some in the Trump White House as the administration’s greatest foreign policy challenge.
[See: 7 ETFs for a Solid Portfolio Defense.]
“North Korea best not make any more threats to the United States,” Trump said. “They will be met with fire and fury like the world has never seen.”
North Korea’s state-run news agency responded with a report that Pyongyang is “examining the operational plan” to strike areas around Guam with medium-to-long-range strategic ballistic missiles.
The CBOE volatility index, which is also known as the “fear index,” spiked more than 10 percent late Tuesday afternoon, with the bulk of the day’s gains coming in the last few hours of trading. The volatility index, or VIX, has been trading near historical lows for several weeks, which has raised concern among some analysts.
[See: 13 Ways to Take the Emotions Out of Investing.]
South Korean stocks were other swift movers on the news. The iShares MSCI South Korea Index Fund (ticker: EWY), which was in the black around lunchtime, ended up losing about 1 percent.
Gold, traditionally seen as a safe haven investment where investors seek refuge in times of tumult, advanced nearly $10, or 0.8 percent, to $1,272 an ounce.
More from U.S. News
7 Great Ways to Invest in Cuba
The Top 10 Investment Portfolio for Millennials
9 Investing Myths That People Still Believe
North Korea Threats Rattle U.S. Markets originally appeared on usnews.com
