Futures on the S&P 500 Index fell as North Korea’s firing of a missile over Japan rekindled geopolitical angst two weeks after U.S. president Donald Trump warned aggression would be answered harshly.
September contracts dropped 0.6 percent as of 11:15 a.m. in Hong Kong, paring a decline of as much as 0.9 percent. The missile landed about 1,200 kilometers (745 miles) off Hokkaido in the Pacific Ocean, Japan Chief Cabinet Secretary Yoshihide Suga told reporters, adding there were no reports of damage.
Asian stocks fell, with Japan’s Nikkei 225 retreating 0.7 percent as traders braced for an escalation of tensions that have previously been capable of piercing the calm in global equities. South Korea’s Kospi Index slid as much as 1.6 percent, the most in more than two weeks.
Japan’s Prime Minister Shinzo Abe said that he agreed with Trump to increase pressure on North Korea following a 40-minute phone call on Tuesday morning. He urged China and Russia to join in taking action against Kim Jong Un’s regime. South Korea conducted bomb-dropping drills after President Moon Jae-in ordered a show of force against the provocation.
Futures on the CBOE Volatility Index rose 8.3% after the VIX closed the Monday session at 11.32, down from its 2017 high of 16.04 reached on Aug. 10.
Source: Bloomberg Pro Terminal
Jr Trader Alexander Kumanov
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