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  • The three main US indices initially fell after the US President Donald Trump announced that he decided to cancel the summit with North Korean Leader Kim Jong Un.  
  • The US plan to impose 25% tariffs on imported vehicles and the fruitless second round of talks between the US and China over trade war also collaborated to the risk-off sentiment on Wall Street.

The S&P 500 Index lost 0.20% to 2,727.76 while the Dow Jones Industrial Average dropped 0.30% to 24,811.76. The Nasdaq Composite Index closed virtually unchanged losing 0.02% to 7,424.43.  

The risk-off sentiment was further compounded by the recent announcement that the US is planning to impose 25% tariffs on imported vehicles. In addition, the second round of talks between the US and China have been so far rather vain leading to no conclusive agreement.

However, in mid-American session, stocks snapped back and virtually erased their previous daily losses.

“Sadly, based on the tremendous anger and open hostility displayed in your most recent statement, I feel it is inappropriate, at this time, to have this long-planned meeting,” Trump wrote to Kim in a letter.

“The North Korean regime has long given ample reason to question its commitment to stability. We must continue to work with our allies toward a peaceful resolution, but that will require a much greater degree of seriousness from the Kim regime. At the same time, Congress has provided significant tools to hold North Korea accountable, and it is important that the United States not relent in this maximum pressure campaign,” said House Speaker Paul Ryan in a statement.

Senator Marco Rubio, Senate Intelligence Committee member reacted by saying: “Kim Jun Un, in the words of a wise man “Congratulations, you just played yourself”. Withdrawing from talks with North Korea is 100% the right decision. Kim doesn’t want a deal. He has deliberately sabotaged the talks over the last two weeks and was setting us up to take the blame,” he wrote in a tweet.  

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