Global equity markets have been hit hard this week – the Dow's 10-session record run halted in its tracks – as already cool relations between the US and North Korea turn to ice and risk appetite to dust.
At the same time, perceived havens have flourished. These are the assets investors believe will continue to gain, or lose the least, in the event of a global breakdown in market confidence.
On Friday, President Trump upped the ante – saying that his warning to Pyongyang of a "fire and fury" response if it persists in its aim to target missiles at Guam may not have been "tough enough".
Following this remark, the equity markets in Asia and Europe extended their losses for the week.
Over a tumultuous week, the Dow is down just 1.1%, but there have been some much bigger losses. South Korea's Kospi Composite, for example, is down 3.3% this week, London's FTSE 100 is down 2.5% and Germany's Xetra Dax is down 2.6%.
Some historical context
"Movements so far have not been very large, and we suspect that this will remain the case so long as military conflict is avoided," says Oliver Jones at Capital Economics.
This was the case, says Jones, for US equities during the 1962 Cuban missile crisis when the world, arguably, came the closest to conflict between two nuclear powers.
"Although the S&P 500 fell after US President Kennedy announced the discovery of missiles on Cuba, it had more or less recovered its losses before Khrushchev announced six days later that the missiles would be removed from the island," explains Jones.
In 2003 the markets fell sharply during the weeks leading up to the war on Iraq by US and allied forces. They started to recover just the first airstrikes hit Baghdad.
Havens gain ground
When equity markets are upset, there is a flipside. The traditional "risk-off" trades have found support from nervous investors looking for a safe place to park their funds until the trouble blows over.
The Swiss franc is up 1.2% this week, while the yen in Japan – although a close neighbour to Korea – is up 1.6% over the week.
Rises too for Treasury prices, sending yields lower, gold and other precious metals have underlined the risk aversion currently apparent in financial markets.
The US Vix volatility index is a good measure of risk in financial markets and on Friday hit its highest level since November when Donald Trump put the fear in markets by unexpectedly winning the US presidential election. The Vix is up 40% this week to 16.89.
"A move above 16 in the Vix is a clear sign that the market is spooked," says Kathleen Brooks at City Index.
But there are other factors at play here.
Loss of economic confidence
The escalation of tensions between the US and North Korea has come just a time when, traditionally, market volumes are at a low ebb. August is often a slow month due to the number of market participants in the northern hemisphere on holiday.
Moreover, current geopolitical unease is happening just as economic indicators are beginning to show a slight loss of confidence in the economic outlook.