Stocks plummeted Thursday, following President Donald Trump’s cancellation of the much-anticipated summit with North Korean leader Kim Jong-un.
Trump canceled the June 12 meeting due to “the tremendous anger and open hostility” towards his administration in Kim’s latest statement.
The North Korea-U.S. Summit cancellation only accelerated an already low market responding to a slide in oil prices and uncertainty surrounding possible new tariffs on auto imports as earlier trade negotiations with China dwindled.
As of 1:37 p.m. ET, the Dow Jones Industrial Average was down 83.13, or.33%, at 24,803.68; the S&P 500 was down 5.88 points, or.22%, at 2,727.41; and the Nasdaq Composite was down 4.22 points, or.06%, at 7,421.74.
Some of the biggest drops included Exxon Mobil Co (XOM), Chevron Co (CVX), Toyota Motor Corp (TM), Honda Motor Co (HMC), and Nisaan Motor Co (NSANY), and Deutsche Bank AG (DB).
Here’s why these industry giants are feeling the impact of the canceled Singapore summit.
Energy: Exxon Mobil Co (-2.12) and Chevron Co (-1.57%)
Along with a slide in oil prices, energy companies are also failing as investors respond to reports that the nations of the OPEC cartel plan to produce more oil due to reduced exports from Venezuela and Iran. The new development between North Korea and the U.S. Is only increasing present uncertainties, further dissuading investors from any risky trades.
Auto: Toyota Motor Corp (-1.54%), Honda Motor Co (-1.97%), Nissan Motor Co (-1.76%)
Following Trump’s launch of a national security investigation into U.S. Car and truck imports under Section 232 of the Trade Expansion Act, global auto exporter tycoons felt the aftershock. Last year alone, the U.S. Imported nearly 8.3 million cars, worth $192 billion. Roughly one-third of all U.S. Vehicle imports last year were from Asia. Trump’s investigation proposal added to concerns that inward-looking trade policies could significantly slow economic growth into the second half of the year.
Banks: Deutsche Bank AG (-4.31%)
After Deutsche Bank announced plans to cut more than 10,000 jobs in order to reshape its stock trading operations and accelerate cost cutting, investors are growing weary of the job cuts plan, which will cost the bank nearly $935 million this year. As investors evaluate the impact of that the unstable North Korea-U.S. Relationship might have on trade relations and economic growth, gold has experienced its biggest gain in a month and greasuries rose along with the yen following a shift to safer assets.