Tech Stocks Slide on North Korea Comments

It’s been a rough start to the week for US stock exchanges as tensions between the US and North Korea holds steady, particularly in the wake of  North Korea’s foreign minister commenting that Donald Trump’s tweets over the weekend are “a declaration of war.”
On Monday (September 25), The Guardian reported that Ri Yong-ho–North Korea’s foreign minister–said “The whole world should clearly remember it was the US who first declared war on our country.”
In particular, Ri Yong Ho was referring to Trump’s tweet from Saturday (September 23): “Just heard Foreign Minister of North Korea speak at U.N. If he echoes thoughts of Little Rocket Man, they won’t be around much longer!”

Just heard Foreign Minister of North Korea speak at U.N. If he echoes thoughts of Little Rocket Man, they won’t be around much longer!

— Donald J. Trump (@realDonaldTrump) September 24, 2017

“Since the United States declared war on our country, we will have every right to make countermeasures, including the right to shoot down United States strategic bombers even when they are not inside the airspace border of our country,” Ri Yong Ho was quoted as saying by Reuters. “The question of who won’t be around much longer will be answered then.”
Following those comments, US stocks dropped significantly, and most notably the tech-heavy NASDAQ Composite Index (INDEXNASDAQ:.IXIC) which slid 0.88 percent to close at 6,370.59 points on Monday.
Tech giants like Facebook (NASDAQ:FB), Google parent company Alphabet (NASDAQ:GOOGL), Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL), and Netflix (NASDAQ:NFLX) were notably down, dipping 4.5 percent, 0.95 percent, 1.6 percent, 0.88 percent, and 4.7 percent respectively.
On that note, Ian Winer, head of the equities division at Wedbush Securities, told MarketWatch that there is a “big rotation” out tech stock giants and into commodity and/or retail stocks.
“Index and [qualitative] funds, which had long positions in large-cap tech stocks are now unwinding and portfolio managers are reducing risk,” he said.
Still–all hope isn’t lost for the tech sector recovering from comments made by the North Korean foreign minister.
“Today is mostly about rotation from big-winning tech stocks and into losing energy and retail stocks, which is usually a healthy sign of the bull market,” Michael Antonelli, equity sales trader at Robert W. Baird & Co said, according to MarketWatch.
Antonelli continued, stating that news out of North Korea generally sparks immediate impact on markets, but doesn’t usually last; only time will tell, however.
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Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.