The market reacts negatively in regards of Trump's last comments.. and this is likely to continue

Geopolitical uncertainty reigned for a third day in a row as President Trump and North Korea traded escalating threats, though no concrete steps were made toward conflict.

The Dow Jones Industrial Average was down 0.9%, around 204 points lower and retreating below its 22,000 level.

The S&P 500 fell 1.45% and was trading at session lows. The S&P 500 has fallen for three straight days, the longest losing streak of the month. It was its worst daily performance since May 17. Thursday's losses pushed the S&P 500 into the red for the month. The Nasdaq slid 2.1%. The Volatility Index increased 45% to 16.12.

Tensions between North Korea and the United States have intensified in recent days after Trump warned of severe retribution should the authoritarian state proceed with any more missile tests or threats. In a statement delivered at his Bedminster, N.J., golf club on Tuesday, Trump said, "North Korea best not make any more threats to the U.S. They will be met with fire and fury like the world has never seen."

The iShares MSCI Emerging Markets Index ETF (EEM) , an index tracking equity-market performance in emerging markets, was lower on Thursday afternoon. The index declined more than 2%, its worst daily performance since mid-December.

Meanwhile, U.S. inflation trends remained weak in July, with producer prices falling 0.1%, according to the Bureau of Labor Statistics. The decline was the largest since August 2016, and economists had expected 0.1% increase. Core prices, which exclude food and energy, fell 0.1%, the first drop of the year.

Macy's Inc. (M)   declined more than 10% despite topping quarterly earnings and sales estimates.Kohl's Corp. (KSS)  dropped 5.8% after Macy's issued a disappointing outlook

Source: Bloomberg Pro Terminal

Trader Bozhidar Arabadzhiev

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