Wall Street reaction to threats between President Donald Trump and officials in North Korea was muted earlier in the week, but cracks are beginning to show, NBC News reported.
The Dow saw its biggest dip since mid-May on Thursday, down 205 points, following similar drops in the Asian and European markets.
The VIX, or volatility index widely used as a proxy to gauge market fear, soared by 44 percent to its highest level since Trump was elected. Still, some market observers downplayed the tensions as verbal bluster.
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Scott Wren, senior global equity strategist at the Wells Fargo Investment Institute, attributed this week’s downturn in the major indices mainly to economic indicators rather than geopolitical brinkmanship.
Kent Boydston, a research analyst at the Peterson Institute for International Economics, said that "historically, there’s relatively little volatility when it comes to stock market and North Korean provocations.” But if North Korea were to launch missiles toward Guam or Hawaii "that would certainly be more of an escalation" that could potentially roil markets more.