Market Snapshot: U.S. stock futures drop after North Korea test, as traders take Labor Day break
U.S. stock-index futures fell Monday, with analysts blaming the drop on renewed worries about North Korea after the isolated nation conducted its largest-ever nuclear test.
Futures for the main equity benchmarks were declining alongside European and Asian markets, putting the market on track for a selloff at Tuesday’s open, as American stock exchanges are closed Monday for Labor Day.
Dow Jones Industrial Average futures YMU7, -0.26% pulled back by 53 points, or 0.2%, to 21,927.00. They briefly traded lower by as many as 103 points, according to FactSet data.
S&P 500 futures ESU7, -0.34% lost 7.70 points, or 0.3%, to 2,466.50, while Nasdaq-100 futures NQU7, -0.35% shed 20 points, or 0.3%, to 5,968.25.
North Korea on Sunday detonated a nuclear device far more powerful than any that it has previously tested, and South Korea said Monday that Pyongyang is making preparations for the possible launch of another intercontinental ballistic missile.
“This North Korean-induced crisis has led to an immediate selloff in risk assets, particularly in Asian stocks, leading to a concentrated move into safe-haven assets,” said Mihir Kapadia, CEO of Sun Global Investments, in a note Monday. “There will be a period of caution now as markets await the international response.”
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Among the safety plays rising after North Korea’s latest moves, gold futures GCZ7, +0.69% jumped and flirted with a one-year high.
On Friday, the Dow DJIA, +0.18% , the S&P 500 SPX, +0.20% and the Nasdaq Composite COMP, +0.10% all finished higher and scored their second straight weekly gain. The Dow and S&P stand less than 1% below their all-time closing highs hit a month ago, while the Nasdaq achieved a fresh record close on Friday.