Traders work on the floor of the New York Stock Exchange (NYSE) in New York, on Tuesday, October 23, 2018. Image Credit: REUTERS

Dubai: The Dow Jones Industrial Average tumbled 400 points at the opening on Tuesday as traders took some risk off the table amid concerns that earnings from US companies may have peaked and geo-political concerns post the murder of journalist Jamal Khashoggi.

The sell-off came on the top of declines that global markets saw last week even as treasuries witnessed a sell-off with yields rising to its multi-year highs as US president Donald Trump said the Fed was “going loco” with interest rate hikes.

On Tuesday, the Dow Jones Industrial Average fell to a low of 24,870.22, before trading 1.13 per cent higher at 25,030.89.

“After a strong two-day rally, Chinese stocks fell back sharply overnight. As a result, the losses for European indices sharply increased at the open this morning while US index futures also fell across the board,” Fawad Razaqzada, a market analyst at Forex.com said.

The S&P 500 index also traded lower, falling 1.43 per cent to be at 2,716.58. The STOXX Europe 600 Index fel 1.34 per cent to be at 354.92. The Shanghai composite index closed 2.26 per cent lower at 2,594.83, snapping a two day gaining streak.

US indices, which have been registering losses for the past few sessions, have turned flat on a year-to-date basis.

The indices have been on a bull run since 2009, as relaxed money policies implemented by the US central bank inflated asset prices, and the positive momentum continued after the US president assumed office, amid tax cuts and a recovering US economy.

“With the various geopolitical risk factors bubbling violently in the cauldron, all the ingredients for a market-shaking sell-off across global stocks seem to be in place. All good things must come to an end and this could be the story for the bullish global equity markets,” Lukman Otunuga, Research Analyst at FXTM said.

Gold shines

Meanwhile, the gold price rose as investors sought refuge in the safe haven. Treasury yields fell.

Gold for December delivery rose 1.1 per cent to reach $1,238.40 an ounce. The yellow metal has shed more than 6 per cent since January despite rising geo-political risks and heightened trade conflicts.

“The yellow metal has scope to shine with intensity this week as the risk-off mood sends investors rushing to any form of safety,” Otunuga said.

“A solid breakout and daily close above the $1,233.50 resistance level is likely to inject gold bulls with enough inspiration to challenge $1,245,” Otunuga said.

“However, with the dollar also benefiting from safe-haven flows there could be fierce competition between the two,” Otunuga said. The dollar index, which has been on a gaining streak since a month, traded at 95.92, down 0.11 per cent. The US 10 Year Treasury Note fell 0.07 per cent to be at 3.128 per cent. Yields have hit multi-year highs in the last few weeks as a strong US economy has spurred the Federal Reserve in the direction of higher interest rates.