Tuesday September 5th

5-09-2017

Dow futures fall 60 points as North Korea concerns cast uncertainty over Wall Street

U.S. stock index futures pointed to a lower open on Tuesday, as geopolitical concerns surrounding North Korea's relationship with the West amplified jitters in market trading. Dow Jones industrial average futures declined 60 points, while S&P 500 and Nasdaq 100 futures pulled back 5.5 points and 12 points, respectively. Geopolitics concerns have resurfaced once again, as markets worldwide were on edge after North Korea conducted its sixth and most powerful nuclear test yet. The U.S. stock market was closed on Monday because of the Labor Day holiday, but futures fell along with global equities markets. The Stoxx 600 index, which tracks a broad swath of European equities, fell 0.52 percent on Monday, while the Japanese Nikkei 225 declined 0.9 percent. On Tuesday, the Stoxx 600 index rose marginally while the Nikkei pulled back another 0.6 percent. Investors around the world also increased their exposure to traditional safe-haven assets like gold and the Japanese yen. Gold futures for December delivery rose 0.4 percent to $1,335.90 per ounce, around a one-year high. The yen gained 0.39 percent against the dollar to 109.29. But optimism from the M&A space helped keep investor sentiment in check. On Monday, United Technologies said it had agreed to buy aircraft parts manufacturer Rockwell Collins for $30 billion, including debt. Elsewhere, two leading members from the U.S. central bank are set to deliver remarks independently. The Fed expects to raise rates once more this year, but market participants are not so convinced. Market expectations for a December rate hike are just 42 percent, according to the CME Group's FedWatch tool. Speaking of data, factory orders are set to be released at 10 a.m. ET. The repercussions of Hurricane Harvey continue to leave its mark on markets, with investors wondering how much damage the natural disaster will have on the energy sector. Oil prices ticked higher on Tuesday, with U.S. crude trading around $48.10 per barrel at 8:19 a.m. ET, while Brent was last standing at around $52.76. Overseas, European stocks were trading higher, while markets in Asia closed on a relatively mixed to positive note. The Nikkei 225 declined 0.63 percent, or 122.44 points, to close at 19,385.81. South Korea's benchmark Kospi index reversed slight gains made earlier, slipping 0.13 percent to finish the session at 2,326.62, after closing lower by more than 1 percent in the previous session. Hong Kong's Hang Seng Index slid 0.05 percent by 3:11 p.m. HK/SIN after trading higher for most of the session. Mainland stocks were resilient: The Shanghai Composite gained 0.16 percent, or 5.5463 points, to close at 3,385.1293 and the Shenzhen Composite inched higher by 0.204 percent, or 4.0163 points, to end at 1,972.1382.