The Dow Jones industrial average and the S&P 500 closed lower on Tuesday after the North Korean ambassador to the UK told Sky News the country will proceed with its sixth nuclear test.
The 30-stock index fell as much as 74.24 points before closing about 40 points lower. The S&P dropped as much as 0.29
"North Korea really doesn't have a way of attacking the U.S. directly other than maybe special forces, teams," said Bruce Bennett, senior defense analyst at Rand Corp. "They may be able to cause some damage within the [Asian] region."
The Nasdaq composite held on to slight gains and posted a record close.
"To me, my initial take is this is not uncommon," said Eurasia Group's Scott Seaman. This is "not something that would make me stop in my tracks."
"This just strikes me to be fairly normal to North Korea's bombastic rhetoric," he said.
Equities had traded mostly flat before Sky News' interview with the North Korean ambassador, as investors braced themselves for the end of the earnings season.
Dow intraday chart
"The first-quarter earnings have been fantastic and it's likely we've hit peak earnings growth for 2017," said Nick Raich, CEO of The Earnings Scout. "I think the market is going to need some time to digest that."
According to data from FactSet, 75 percent of the S&P 500 components that had reported as of Friday had topped bottom-line expectations, while 66 percent had beaten sales estimates. Eighty-three percent of S&P 500 companies had reported as of Friday.
Companies set to report Tuesday include Priceline, News Corp.
Strong corporate results have helped propel stock prices as well as investor confidence.
"We are in a low volatility environment," said Michael Shaoul,
On Tuesday, the CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded below 10, near levels not seen since December 2006.