The three major US stocks indexes ended higher on Friday, snapping three days of losses, as investors bet on slower USA rate hikes, but gains were muted by increasingly aggressive exchanges between the United States and North Korea. The S&P 500 sank 1.7% from Tuesday to Thursday, the Dow fell 1.1%, and the Nasdaq dropped 2.4%.
Entering Friday's session, the Dow was on track to post its worst weekly performance since March 24, while the S&P 500 stared at its biggest weekly loss since the week before the USA election. Bond and gold prices, traditional havens for nervous investors, were little changed, and the VIX, a measure of how much volatility investors expect in stocks, fell 3.3 percent following a 44.4 percent jump the day before.
Pu described Wednesday's declines as "a pullback" by investors using the North Korea tensions as an excuse to lock in recent gains.
NORTH KOREA: President Donald Trump warned North Korea of "fire and fury" this week in response to recent threats from Pyongyang, which said it was examining plans for attacking Guam, a US territory in the Pacific with a military base.
Some investors are on edge after U.S. President Donald Trump warned North Korea of "fire and fury".More news: Guam Governor Says Trump Called, Assured Island Is Safe
More news: Pep Guardiola claims Premier League spending is 'unsustainable'
More news: Mo Farah & Usain Bolt prepare for final events
Markets had earlier stabilised as Tillerson tried to ease tensions, saying he did not believe there is "any imminent threat" to Guam, and expressed hope diplomacy would prevail. U.S. PPI came in at -0.1%, below the 0.1% forecast and previous read.
"Today's inflation data put the Fed on pause and really diminishes the fact that there's still some noise going around with the North Korea-U.S. situation", said Phil Blancato, CEO of Ladenburg Thalmann Asset Management.
Energy stocks also fell along with the price of crude oil. "That reset is being triggered by North Korea geopolitical concern and stretched valuations", said Peter Kenny, senior market strategist at Global Markets Advisory Group, New York. The NASDAQ Composite Index fell 0.28% and closed the day at 6,352.33. Lockheed Martin, Raytheon, General Dynamics and Northrop Grumman and the Dow Jones U.S. defence index .djusdn was up 1.48 percent after hitting a record high.
Benchmark U.S. 10-year notes last rose 6/32 in price to yield 2.1905 percent, from 2.211 percent late on Thursday. Economists had expected prices to rise by 0.2 percent.