Stocks Take a Hit on Trump’s Summit Cancellation

Investors, hit with another wave of uncertainty on Thursday following President Donald Trump's decision to call off a summit with North Korea, sold off U.S. equities as expectations for a market turnaround waned going into the holiday weekend. The summit, scheduled for June 12, was seen as a means to ease tensions between the countries and bring more stability to the Korean Peninsula. (See also: 5 Stocks to Outperform in 2018’s Volatile Market.)

On Thursday, the Dow Jones Industrial Average (DJIA) Index was hard hit on the news, which broke just 30 minutes before the market open, driving the blue-chip index down nearly 300 points before recouping some of its losses later in the afternoon. The Dow closed down 0.3% on Thursday, while the S&P 500 fell about 0.2% and the Nasdaq declined less than 0.1%.

Geopolitical uncertainty has been a major factor behind a surge of volatility in the market in 2018, bringing an abrupt end to the nine-year bull market on a handful of factors including fears of inflation, rising interest rates and a threat of a trade war. Both the Dow and the S&P 500 are slipping on Friday morning, while the Nasdaq is up 0.2%. The Wall Street Journal, citing money managers, indicated that expectations for a recovery in equities on Friday are low, since trading volumes tend to be light ahead of a holiday weekend. 

Uncertainty Drags on Exxon, Chevron 

The energy segment was the hardest hit on Thursday's North Korea news, falling 1.7%, mounting earlier losses attributed to a drop in oil prices. U.S. crude for July delivery fell 1.6%, or $1.13 per barrel, to $70.71. Shares of Exxon Mobil Co. (XOM) fell 2.3% to $80.27, while Chevron Co. (CVX) sank 1.6% to $126.61. (See also: Buy These Energy Stocks on Crude Oil Price Surge.)

Also this week, worries of trade tensions jumped on news from the U.S. Commerce Department that the Trump administration was weighing new tariffs on vehicles and auto parts imports. Toyota Motor Corp. (TM), Honda Motor Co. (HMC) and Nissan Motor Co. (NSANY) all saw their shares fall on the news. 

Bright spots amid a broad slump for most of S&P 500 sectors include lower-risk, higher-dividend stocks in utilities and telecommunications.