Wall Street to open flat on rising U.S. yields, North Korea worries

(Reuters) – Wall Street was set to open little changed on Wednesday as investors assessed the impact of a surge in bond yields, while growing doubts about the U.S.-North Korea summit also weighed.

FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., May 2, 2018. REUTERS/Brendan McDermid

North Korea threw next month’s summit between Kim Jong Un and President Donald Trump into doubt, threatening weeks of diplomatic progress by saying it may reconsider if Washington insists it unilaterally gives up its nuclear weapons.

The country’s threat to cancel the June 12 summit in Singapore adds to the jitters in the market, which is already dealing with China-U.S. trade tensions and inflation concerns.

The Dow Jones Industrial Average .DJI and the Nasdaq .IXIC recorded their biggest one-day percentage drop in three weeks on Tuesday after strong retail sales data stoked inflation worries.

“Traders are looking for some stability coming off of the sharp decline yesterday,” said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville, New Jersey.

“(They are) looking for a little more visibility coming from the trade front with China even as concern over inflation keeps rearing its head.”

At 8:47 a.m. ET, Dow e-minis 1YMc1 were down 19 points, or 0.08 percent. S&P 500 e-minis ESc1 were down 1.75 points, or 0.06 percent and Nasdaq 100 e-minis NQc1 were down 2.25 points, or 0.03 percent.

The U.S. 10-year Treasury yield US10YT=RR spiked above the key 3 percent level to its highest since July 2011 on Tuesday after the retail data. It was last at 3.0613 percent.

Federal funds futures implied that traders saw a 54 percent chance that the U.S. Federal Reserve would raise rates for a fourth time by year-end. [MMT/]

Macy’s (M.N) 6.9 percent jump after reporting a much better-than-expected rise in same-store sales in the first quarter, helped shares of other retailers. J. C. Penney (JCP.N), Kohl’s (KSS.N) and Nordstrom (JWN.N) were all up more than 2.5 percent to 3.5 percent.

Micron (MU.O) rose 2.1 percent in premarket trading after RBC Capital Markets began coverage with “outperform” rating, while AMD (AMD.O) gained 1.7 percent after a rating upgrade at Susquehanna.

Reporting by Medha Singh in Bengaluru; Editing by Anil D’Silva

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