U.S. stocks dropped on Tuesday, pushing implied volatility to five-month highs as investors piled into traditional safe havens from geopolitical risks.
The large-cap S&P 500 Index declined by as much as 0.8%. It would later pare losses to finish 0.1% lower at 2,353.78.
Six of 11 main sectors finished in the red. Financials stocks closed down 0.3%. Shares of IT and materials companies declined 0.4% and 0.%, respectively.
On the opposite side of the ledger, real estate shares contributed positively with a gain of 0.4%. Industrials shares also rose 0.2%.
Selling pressure sent the VIX Volatility Index to its highest level since the November presidential election. The market’s standard fear gauge rose 7.3% to 15.07, on a scale of 1-100 where readings below 20 normally indicate complacency.
Investors poured into the safety of precious metals amid heightened geopolitical tensions between Russia and the United States. U.S. Secretary of State Rex Tillerson said during a G7 meeting that Russia must end its support of Syrian President Bashar Assad.
Last week, President Donald Trump ordered the firing of 59 Tomahawk missiles on a Syrian government airfield on accusations the Assad regime deployed chemical weapons against civilians. The Syrian government has denied launching any chemical attack.
President Trump also stoked haven buying after tweeting that the U.S. would “solve” the North Korea problem with or without China. In another tweet, the president said he would offer China a better trade deal if it can contain Pyongyang.
S&P 500 Index