Wall Street slips as flight-to-safety takes control
|- Trade conflict between the United States and China push investors away from risky assets.
- Dow Jones turns red for the year.
- CBOE Volatility Index rises to June highs.
Major equity indexes started the day on a negative note and continued to push lower on Tuesday as the latest headlines on the trade conflict between the United States and China suggested that either side is looking to take a step back.
The CBOE Volatility Index (VIX), Wall Street's widely used fear gauge, advanced to its highest level of the month before retreating in the last hours of the session. At the end of the session, the index was up 9% at 13.43.
Commenting on the market sentiment, "investors are waking up to the idea that all the rhetoric on trade could be more than just a negotiating tactic," Emily Roland, head of capital markets research at John Hancock Investments in Boston, told Reuters.
Hurt by trade war concerns, Boeing and Caterpillar, which rely heavily on the Chinese demand, suffered heavy losses and caused the S&P 500 Industrials Sector (SPLRCI) to record its biggest daily decline, 2.14%, since April. On the other hand, another 1% decrease witnessed in the barrel of West Texas Intermediate ahead of OPEC's Vienna summit weighed on the S&P 500 Energy Index (SPNY) for the second day in a row, which closed 0.3% lower.
The Dow Jones Industrial Average lost more than 300 points to erase the gains of the year before closing the day 286.22 points, or 1.15%, lower at 24,701.25 points. The S&P 500 fell 11.01 points, or 0.40%, to 2,762.74, and the tech-heavy Nasdaq Composite dropped 20.27 points, or 0.26%, to 7,726.76.
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