Stocks fell this morning due to controversy abroad and disappointing corporate earnings. Geopolitical tension rose between Pakistan and India after the Pakistani military shot down two Indian aircrafts. In general, if the situation does not escalate and this is viewed as a more localized incident, the broader risk markets should recover. The India-Pakistan clash has only added to the host of uncertainties being tracked by the markets. Investors are still closely following China trade talks and the progress with Brexit.
Bond prices are roughly unchanged, and the 10-year treasury is at 2.64%. Yesterday, Federal Reserve Chairman, Jerome Powell, stated that the U.S central bank is in no rush to raise interest rates. Officials are citing slower global growth and its influence on the U.S. economy as the main reason to hold rates. Powell told lawmakers that this is a good time to be patient and watch and wait and see how situations evolve. These situations include slower growth in China and Europe, political uncertainty over trade negations with China, and the U.K.’s decision to leave the EU.