US open: Stocks on track to extend losses amid rising geopolitical tension

US stocks were lower on Wednesday and on track to extend their recent losses as investors held off from making big bets as geopolitical tensions continued to build between the Trump administration and Syria, Russia and North Korea.

At 1544 BST, Dow Jones Industrial Average was down 0.23% to 20,603.90, the S&P 500 fell 0.24% to 2,348.21, and the Nasdaq was 0.24% off at 5,852.52.

Meanwhile, oil prices had gained ground earlier on a report that Saudi Arabia wants to extend the producer agreement to cut production for another six months when OPEC meets in May.

However, at 1543 BST West Texas Intermediate and Brent crude were both flat at $53.43 and $56.18 per barrel, respectively.

FXTM research analyst Lukman Otunuga said the heightened geopolitical risks around Syria and North Korea have left markets tense this week and investors on high alert.

“The combination of profit taking, geopolitical concerns and overall uncertainty has exposed the greenback to downside risks this week. With short-term bulls still in control amid the expectations of higher US rates, the current dollar decline could be treated as a technical correction. From a technical standpoint, the daily bullish outlook remains valid as long as the dollar index keeps above 100.25.”

The dollar was flat versus the yen at 109.55 after sliding to a five-month low on geopolitical tensions, down 0.22% against the pound at 0.7988 and 0.1% weaker against the euro at 0.9421.

US president Donald Trump was forced to clarify his position on Syria after the US launched missile strikes on the Syrian government in response to a chemical attack on civilians last week.

He told Fox News that the US was “not going into Syria” and the airstrikes were “not a harbinger of some change in our military campaign”.

Later, the White House accused Russia, which backs Syrian president Bashar al-Assad, of trying to cover up the chemical attack.

Investors were also mulling over Trump’s attempt to pressure China to do more to rein in North Korea, warning that if it does not, the US will act alone. China called for a “peaceful” resolution as the US dispatched an aircraft carrier strike group to the Korean Peninsula.

On the data front, mortgage applications increased 1.5% for the week ending 7 April to 40.29, from a week earlier, according to the Mortgage Bankers Association. This was the first increase in four weeks.

The refinance share of overall mortgage activity fell to 41.6%, its lowest level since September 2008, from 42.6% the previous week.

Meanwhile, US import prices fell 0.2% in March as expected, after increasing 1.4% over the previous three months. Prior to the March downturn, import prices trended up over most of the past 12 months, advancing 4.2% between March 2016 and March 2017. However, import prices fell 6.1% for the previous 12 months.

In contrast, US exports rose 0.2% in March, continuing an upward trend since the index last fell on a monthly basis in August, boosted by agricultural and non-agricultural exports. Export prices also increased over the past year, rising 3.6% for the year ended in March, matching the 12-month gain recorded in December 2011.

In corporate news, BlackBerry climbed 17.92%, hitting its highest level since last January after the technology firm won a $814.9m arbitration case against Qualcomm, which fell 1.94%.

United Continental rose 0.22% after the airline’s chief executive finally apologised for the way its staff treated a passenger who was dragged from his seat on an overbooked flight, while rival Delta Air Lines rose 1.97% after reporting better-than-expected first-quarter earnings.

Whole Foods Market was up 1.01% following a Bloomberg report that online retail giant Amazon considered buying the company last year but did not pursue a deal.