Stocks Make Comeback, but Haven't Fully Recovered From North Korea Selloff

S&P 500 Nasdaq Dow Fell Lower on August 10 amid Global Tensions

S&P 500 Nasdaq Dow Fell Lower on August 10 amid Global Tensions

The index ended up 4.93 points at 16.04, the highest level since November 8, when Trump was elected president.

The markets may benefit from bargain hunting, as some traders look to pick up stocks at reduced levels following the pullback seen over the past few sessions.

"As a portfolio manager, you say, 'Do I think we'll get a war out of this?'" said Torsten Slok, chief global economist at Deutsche Bank, referring to the back and forth between North Korea and President Donald Trump.

The tweet came a day after Trump said his previous warning to North Korea that it would face "fire and fury" may not have been "tough enough".

"I will tell you this, North Korea better get their act together or they're going to be in trouble like few nations ever have been in trouble in this world", Trump said.

Trump's threats have escalated since reports broke at the beginning of the week that North Korea had successfully produced a nuclear warhead that could be fitted inside its missiles.

Trump continued to ramp up the rhetoric with a post on Twitter this morning indicating that the USA is prepared to take military action against North Korea. And in a Friday morning tweet, Trump wrote: "Military solutions are now fully in place, locked and loaded, should North Korea act unwisely". Trump took specific aim at North Korean leader Kim Jong Un, saying, he had "disrespected our country greatly", and would not be "getting away with it".

"We have not had a 5 percent correction since June 2016".

However, Federal Reserve Bank of New York President William Dudley suggested on Thursday that the central bank was on track to raise interest rates once more as he expects sluggish inflation to rise over the next several months.

Over the next three months, the average gain has been good but not great - +1.15%. Core prices had also been expected to climb by 0.2 percent.

And with that, the S&P 500's steak of 58 days without a 1% move in either direction came to an end.

The Dow Jones Industrial Average closed down 204.69 points, or 0.93 percent, at 21,844.01, the S&P 500 lost 35.81 points, or 1.45 percent, to end the session at 2,438.21 and the Nasdaq Composite fell 135.46 points, or 2.13 percent, to 6,216.87.

The rhetoric, which began late Tuesday and continued into Friday, interrupted stocks' march higher and cracked the calm that has enveloped the market for months. Hong Kong's Hang Seng Index plummeted 560.49 points or 2% to 26,883.51. The Japanese market was closed in observance of the Mountain Day holiday.

The major European markets are also extending a recent move to the downside.

While the German DAX Index has edged down by 0.1%, the French CAC 40 Index and the UK's FTSE 100 Index are both down by 1%.

In commodities, Crude failed to hold the 50 per barrel level, falling almost 2% topping at $50.22 earlier in the session. Meanwhile, after jumping USD10.80 to USD1,290.10 an ounce in the previous session, gold futures are climbing USD6.50 to USD1,296.60 an ounce.

The local currency was trading at 1,147.55 won against the US dollar, down 5.55 won from the previous session's close.

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