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Wall Street will have to divide its time in the coming week, keeping one eye on developments with North Korea and another on the bottom line as retailers cap the second-quarter earnings season.

The communist nation, slightly larger than the state of Virginia, has threatened financial stability in the past week, beginning with reports its authoritarian regime had successfully fitted a nuclear warhead inside a missile. That triggered a war of words between the country and U.S. President Donald Trump.

In a statement on Aug. 8, Trump warned of "fire and fury like the world has never seen" if North Korea continued to issue threats. North Korea then said it was assessing a potential missile attack on U.S. territory Guam.

Markets reacted poorly. The Dow Jones Industrial Average snapped a nine-day stretch of record closes, while the S&P 500 had its worst weekly loss since March 24. European indexes also sold off.

  • North Korea Is Making These 3 Hot Defense Stocks Look That Much Hotter

Geopolitical tensions could pressure markets further in the coming week if Trump's rhetoric continues to intensify as it has so far. On Friday morning, he tweeted that the U.S. military was "locked and loaded" in case of "unwise" actions by North Korea.

"This is what we call a purely exogenous risk," Bodhi Ganguli, lead economist at Dun & Bradstreet, told TheStreet. "We know it could happen. We know when it does happen, it will have significant sequences. We don't know when it's going to happen or how exactly it's going to go down."

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He added, "That's what investors like the least. Uncertainty of a kind that you cannot actually predict anything out of it at all."

A more predictable kind of uncertainty is also looming, however: Retail earnings.

On the docket in the coming week, Advance Auto Parts Inc. (AAP) - Get Advance Auto Parts, Inc. Report , Coach Inc. (COH) , Dick's Sporting Goods Inc. (DKS) - Get Dick's Sporting Goods, Inc. Report , Home Depot Inc. HD, TJX Companies Inc. (TJX) - Get TJX Companies Inc Report , and Urban Outfitters Inc. (URBN) - Get Urban Outfitters, Inc. Report will report on Tuesday, Aug. 15; L Brands Inc. (LB) - Get L Brands, Inc. Report , and Target Corp.  (TGT) - Get Target Corporation Report on Wednesday, Aug. 16; Bon-Ton Stores Inc.  (BONT) , Buckle Inc. (BKE) - Get Buckle, Inc. Report , Gap Inc. (GPS) - Get Gap, Inc. Report , Ross Stores Inc.  (ROST) - Get Ross Stores, Inc. Report , and Walmart Stores Inc.  (WMT) - Get Walmart Inc. Report on Thursday, Aug. 17; and Estee Lauder Companies Inc.  (EL) - Get Estee Lauder Companies Inc. Class A Report on Friday, Aug. 18.

  • First Sears Will Die. Then Maybe J.C. Penney. Then...

More than 90% of S&P 500 companies have reported earnings so far this quarter. Of those, nearly 74% have exceeded earnings estimates, while 68% have topped sales forecasts, according to Thomson Reuters data. The consumer staples and consumer discretionary sectors have been the smallest earnings growth this quarter, rising just 4.6% and 3.7%, respectively. That compares to an unparalleled 538.7% surge in energy earnings and a 16.3% increase in tech.

Retail sales for July should give an indication of how consumers are spending in the first month of the third quarter. Economists surveyed by FactSet anticipate sales will increase 0.4% in July, reversing a 0.2% decline in June.

It's a busy week on the economic calendar, too. The Empire State Manufacturing Survey and the housing market index for August, import and export prices for July, and business inventories for June will be released on Tuesday; housing starts for July, and the Federal Open Market Committee's minutes from its late July meeting on Wednesday; the Philadelphia Fed Business Outlook Survey for August, and industrial production for July on Thursday; and a preliminary read on consumer sentiment for August on Friday.

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