Investing.com – U.S. stocks sunk on Monday as risk sentiment turned bearish amid escalating U.S.-N.Korea tensions after North Korean Foreign minister Ri Yong Ho warned that Pyongyang has the right to “shoot down U.S. bombers”.
The Dow Jones Industrial Average closed lower at 22295. The S&P 500 closed 0.22% lower while the Nasdaq Composite closed at 6370.59, down 0.88%.
Investors fled risky assets in search of safe-havens such as gold and the yen, as tensions on the Korean Peninsula spiked as North Korea upped its threats against the U.S. on Monday.
“The whole world should clearly remember it was the US who first declared war on our country." North Korea Foreign Minister Ri Yong said in reference to President Donald Trump’s tweet that “North Korea won’t be around much longer”.
"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," Ri said.
That added to earlier geopolitical uncertainty from Europe in the wake of elections in Germany which saw support for German chancellor Angela Merkel’s conservative alliance slump to its lowest since 1949.
Despite securing a fourth term as German chancellor, Merkel’s Christian Democratic Union had their worst election showing since 1949, ceding ground to the far-right Alternative for Germany (AfD) party.
Following the result, some analysts questioned whether the disappointing result would complicate Merkel’s efforts to stitch together a complicated three-way coalition that can withstand pressure from the anti-immigration AfD party.
“Though the presence of the AfD should not significantly impact German intentions regarding the EU in the immediate future, the rising populism dampened the mood in the euro markets,” said Ipek Ozkardeskaya, senior market analyst at LCG, in a note to clients.
On the corporate front, shares of Apple (NASDAQ:AAPL) fell for the fourth-straight session, weighing on the broader tech sector, as the tech giant continues to struggle to shake off recent criticism of its latest smartwatch the Apple Watch 3.
'Bulls and Bears' on Wall Street
The top Dow gainers for the session: Exxon Mobil Corporation (NYSE:XOM) up 1.3%, Cisco Systems Inc (NASDAQ:CSCO) up 1.1% and General Mills Inc (NYSE:GIS) up 1.1%
Visa Inc (NYSE:V) down 2.5%, McDonald’s Corporation (NYSE:MCD) down 1.7% and Microsoft Corporation (NASDAQ:MSFT) down 1.6%, were among the worst Dow performers of the session.