US open: Stocks open lower as geopolitics take centre stage
US stocks opened lower on Monday as geopolitical tensions remained at the forefront of investors' minds.
At 1530 GMT, the Dow Jones Industrial Average was down 0.47% at 28,500.94, while the S&P 500 was 0.26% weaker at 3,226.53 and the Nasdaq Composite came out the gate 0.28% softer at 8,995.21.
The Dow opened 133.94 points lower on Monday, continuing on from Friday when stocks recorded heavy losses after Tehran vowed to retaliate for a White House airstrike that killed top Iranian commander General Qasem Soleimani.
Iran also said over the weekend that would not abide by uranium enrichment levels set out in former President Barack Obama's landmark 2015 nuclear deal.
Following the news, oil prices surged and gold prices hit a seven-year high as investors sought refuge in traditional safe havens.
US President Donald Trump said on Sunday that he would look at slapping sanctions on Iraq after its parliament passed a resolution calling for the expulsion of US troops from the country.
"We have a very extraordinarily expensive airbase that’s there. It cost billions of dollars to build. Long before my time. We’re not leaving unless they pay us back for it," said Trump.
Oanda analyst Craig Erlam said: "Unfortunately, the rhetoric from all sides appears to be heating up rather than cooling and retaliation looks almost inevitable.
"Now is a time for calm heads and I'm afraid there doesn't appear to be many of those around."
On the data front, US service sector firms indicated a moderate expansion in business activity at the end of 2019, with growth driven by a stronger rise in new orders.
The seasonally adjusted final IHS Markit US Services Business Activity Index registered 52.8 in December, which was up from a reading of 51.6 in November, signalling a further rebound in output growth following a slump in activity during the summer.
The moderate upturn accelerated to the fastest since July and was linked to more favourable demand conditions.
In corporate news, Boeing shares was 1.13% lower in early trading after the aerospace giant was said to be considering raising debt in the wake of the ongoing 737 Max crisis.
Shares in Cal-Maine Foods were down 11.53% after its quarterly earnings fell short of expectations, while Commercial Metals stock was up 7.71% at the bell after topping earnings estimates.