Dow fights for direction as traders weigh North Koreas latest posturing

U.S. stocks looked set to struggle for direction on Wednesday, with fresh North Korea worries appearing to weigh on sentiment.

Pyongyang overnight signaled its leader, Kim Jong Un, might pull out of next months summit with President Donald Trump if the U.S. insists on denuclearization for the isolated nation.

The equity market has scored significant gains so far this month, but it suffered a sizable drop on Tuesday, as the Dow halted an eight-session winning streak.

What are the main benchmarks doing?

Dow Jones Industrial Average futures
YMM8, +0.03%
inched higher by 26 points, or 0.1%, to 24,686, while S&P 500 futures
ESM8, +0.05%
tacked on 3.25 points, or 0.1%, to 2,712.25. Nasdaq-100 futures
NQM8, +0.05%
edged up by 8.25 points, or 0.1%, to 6,898.75.

On Tuesday, the Dow
DJIA, -0.78%
, S&P
SPX, -0.68%
and Nasdaq Composite
COMP, -0.81%
all closed lower by 0.7% to 0.8%.

What are strategists saying?

Geopolitical risks are rising again as North Korea pulls out of planned talks with South Korea and threatens to do the same with Donald Trump, said Richard Perry, a Hantec Markets analyst, in a note.

Kim Jong Un is apparently unhappy over the denuclearization program. As yet, there has only been a minor safe-haven move, Perry added.

What are other markets doing?

Gold futures
GCM8, +0.19%
traded higher, helped in part by haven demand.

European stocks
SXXP, +0.06%
were edging up, while Asian markets finished mixed.

Oil futures
CLM8, -0.50%
lost ground, and the ICE U.S. Dollar Index
DXY, -0.02%
was little changed.

Whats driving markets?

The stock market seems to have turned a corner this month, overcoming some concerns about inflation, rising interest rates, trade fights and geopolitical tensions. The Dow is up 2.3% in May so far and roughly flat for the year, as of Tuesdays close.

Even so, rising rates appear to be peeling some investors away from stocks. Tuesdays selloff was blamed in part on the 10-year Treasury notes yield
TMUBMUSD10Y, -0.51%
rise to a seven-year high above 3%. The 10-year yield fell 1 basis point on Monday to trade at 3.066%.

What economic news is on tap?

An April report on U.S. housing starts is slated to hit at 8:30 a.m. Eastern Time, with economists polled by MarketWatch forecasting 1.290 million starts.

At that same time, Atlanta Federal Reserve President Raphael Bostic is due to address the economic outlook at Georgias Augusta Cotton Exchange.

Check out: MarketWatchs Economic Calendar

At 9:15 a.m. Eastern, investors are due to get April data on industrial production, with 0.6% growth expected.

Which stocks are in focus?

Shares in Macys Inc.
M, +1.01%
are likely to see active trading as the retailer is among the companies expected to post earnings before the open.

See: Macys stock is rising but same-store sales are not

Related Topics U.S. Stocks Markets NY Stock Exchange NASDAQ

Quote References YMM8 +7.00 +0.03% ESM8 +1.25 +0.05% NQM8 +3.50 +0.05% DJIA -193.00 -0.78% SPX -18.68 -0.68% COMP -59.69 -0.81% GCM8 +2.50 +0.19% SXXP +0.22 +0.06% CLM8 -0.36 -0.50% DXY -0.02 -0.02% TMUBMUSD10Y -0.02 -0.51% M +0.30 +1.01% Show all references
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Victor Reklaitis is a London-based markets writer for MarketWatch. Follow him on Twitter @VicRek.

Victor Reklaitis

Victor Reklaitis is a London-based markets writer for MarketWatch. Follow him on Twitter @VicRek.

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