Dow, Nasdaq futures slide after reports of North Korean missile launch over Japan

Dow futures dropped 125 points Monday evening following reports that North Korea had conducted a missile launch that flew over Japan.

Nasdaq 100 futures slumped nearly 1%, signaling caution in response to the North Korea news.

Gold, which tends to benefit from market fear, rose 0.7%. The Japanese yen, a safe haven currency, rose 0.8% against the U.S. dollar.

It was unclear how Asian stocks would react to the missile launch. The Nikkei will open Tuesday morning local time.

Analysts said it was clear the situation with North Korea remains tense. " It is going to move back into the headlines and be a cause of volatility for the market," said Art Hogan, chief market strategist at Wunderlich Securities. "At current valuations and low volumes it's not at all unusual for the situation to cause the kind of uncertainty and selling pressure that we are seeing right now."

The Pentagon confirmed that North Korea launched a missile that flew over Japan and landed in the Pacific Ocean. The 5:57 a.m. missile launch prompted warnings for residents in Japan to seek shelter.

A U.S. official said spy satellites had been observing preparations for a ballistic missile test that could reach Guam. The official says the assessment is ongoing.

This launch comes only days after Pyongyang fired three short-range ballistic missiles from the Kangwon province.