US stocks were lower on Wednesday afternoon as investors rushed to safe-haven assets after President Donald Trump's "fire and fury" warning to North Korea escalated tensions with the nuclear-armed nation. North Korea said it was considering plans to fire missiles at Guam, a US-held Pacific island, after President Trump's warning on Tuesday. Trump followed his warning with a tweet on Wednesday about the strength of the American nuclear arsenal, but expressed hope it would not need to be used.
Safe-haven assets gained following the rising geopolitical tensions. Gold rose as much as 1.2 percent to a near two-month high, while the Swiss franc was on track to post its biggest single day rise in about two-and-a-half years. Mounting tensions lifted US defence stocks. Lockheed Martin, Raytheon, General Dynamics and Northrop Grumman were all up, with the Dow Jones US defence index up 1.48 percent at 409.58. The index hit a life-high of 415.49 earlier.
The CBOE Volatility Index, the most widely followed barometer of expected near-term stock market volatility, was up as much as 12.63 points, its highest in more than a month. At 12:28 pm ET (1628 GMT), the Dow Jones Industrial Average was down 52.87 points, or 0.24 percent, at 22,032.47, the S&P 500 was down 2.8 points, or 0.11 percent, at 2,472.12. The Nasdaq Composite was down 16.88 points, or 0.26 percent, at 6,353.58.