Modupe Gbadeyanka
By Investors Hub
The major U.S. index futures are pointing to a roughly flat opening on Wednesday following the sharp pullback seen in the previous session.
Geopolitical uncertainty may keep some traders on the sidelines after North Korea threatened to cancel an historic meeting between leader Kim Jong Un and President Donald Trump.
In a statement published by the state-run Korean Central News Agency, North Korean First Vice Minister of Foreign Affairs Kim Kye Gwan suggested that Trump must accept the reclusive communist country as a nuclear power.
?If the U.S. is trying to drive us into a corner to force our unilateral nuclear abandonment, we will no longer be interested in such dialogue and cannot but reconsider our proceeding to the DPRK-U.S. summit,? Kim said.
Kim pointed to ?unbridled remarks? by U.S. officials such as National Security Adviser John Bolton calling on North Korea to abandon nuclear weapons first and be compensated afterward.
The statement from Kim comes after North Korea canceled high-level talks with South Korea planned for Wednesday over U.S.-South Korean military drills.
Despite the threats, White House Press Secretary Sarah Sanders told Fox News that Trump remains ?ready to meet? with the North Korean leader.
After ending Monday?s trading modestly higher, stocks showed a significant move back to the downside during trading on Tuesday. The major averages pulled back sharply in morning trading and remained firmly negative throughout the afternoon.
The major averages regained some ground going into the close but still ended the day notably lower. Dow slumped 193.00 points or 0.8 percent to 24,706.41, the Nasdaq fell 59.69 points or 0.8 percent to 7,351.63 and the S&P 500 slid 18.68 points or 0.7 percent to 2,711.45.
Profit taking may have contributed to the weakness on Wall Street following a recent upward trend. The modest gains posted on Monday lifted the major averages to their best closing levels in two months.
Negative sentiment was also generated in reaction to react to earnings news from home improvement retailer Home Depot (HD).
Shares of Home Depot moved notably lower after the company reported first quarter earnings that beat analyst estimates but weaker than expected sales.
Traders were also reacting to a jump in U.S. treasury yields, with the yield on the benchmark ten-year note surging up to its highest levels since 2011.
The increase in treasury yields came after a report from the Commerce Department showed retail sales increased in line with economist estimates in the month of April.
The Commerce Department said retail sales rose by 0.3 percent in April after climbing by an upwardly revised 0.8 percent in March.
Economists had expected sales to rise by 0.3 percent compared to the 0.6 percent increase originally reported for the previous month.
Excluding a modest increase in auto sales, retail sales still rose by 0.3 percent in April following an upwardly revised 0.4 percent increase in March.
Ex-auto sales have been expected to climb by 0.5 percent compared to the 0.2 percent uptick originally reported for the previous month.
A separate report from the National Association of Home Builders showed an unexpected improvement in homebuilder confidence in the month of May.
The report said the NAHB/Wells Fargo Housing Market Index rose to 70 in May from a downwardly revised 68 in April. Economists had expected the index to come in unchanged compared to the 69 originally reported for the previous month.
Housing stocks moved sharply lower over the course of the trading session, as concerns about the impact of higher interest rates overshadowed the upbeat homebuilder confidence data.
Reflecting the weakness in the housing sector, the Philadelphia Housing Sector Index plunged by 2.6 percent on the day.
Substantial weakness was also visible among gold stocks, as reflected by the 2.2 percent slump by the NYSE Arca Gold Bugs Index. With the drop, the index fell to its lowest closing level in a month.
The weakness in the gold sector came amid a sharp decline by the price of the precious metal, with gold for June delivery plummeting $27.90 to $1,290.30 an ounce.
Real estate, healthcare, telecom, and semiconductor stocks also moved significantly lower, reflecting broad based weakness on Wall Street.
