Dow Jones Surges by 140 Points as North Korea Tensions Settle
The Dow Jones Industrial Average opened sharply higher on Monday after deescalating tension with North Korea eased pressure on markets.
With futures indicating a strong start to the week, the Dow quickly soared by over 140 points after the opening bell, with the S&P up by 14 points.
"What we're seeing is a bit of a relief rally," Peter Cardillo, chief market economist at First Standard Financial, told CNBC. "The reason for that is the rhetoric has toned down, for the moment."
Over the weekend, Secretary of State Rex Tillerson and Secretary of Defense James Mattis penned an opinion piece in the Wall Street Journal that sought to clarify the extent to which diplomatic solutions with Pyongyang would be pursued. The authors wrote of Donald Trump's administration’s “peaceful pressure campaign” and “diplomatic approach” to North Korea’s denuclearization, while noting the regime’s “dishonesty” and “repeated violations.”
Although markets are constantly trying to anticipate, historically there is "relatively little volatility when it comes to stock market and North Korean provocations,” Kent Boydston, a research analyst at the Peterson Institute for International Economics, told NBC News.
The rebound in equities reflects renewed confidence in assets and the global economy in general, including data from Japan that showed economic growth at 4 percent, marking that nation’s longest growth streak since 2006.