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KRT via AP

Investors have decided that, at least for now, war between the U.S. and North Korea is much less likely than it seemed last week, sending up stocks today with their greatest gains in at least two months.

  • The Dow Jones was up 0.6% and the S&P 500 by 1%. Closer to the theater of potential war, South Korean stocks rose 0.6%, and Hong Kong by 1.36%.
  • North Korean leader Kim Jong Un "is big on using coercive diplomacy to move closer to what he wants ... but he doesn't intend to fight," said James Lewis at the Center for Strategic and International Studies, speaking to Axios last Friday.
  • "He'd like to split the United States and South Korea. But he doesn't want war. He knows what will happen as well as anyone."

Looking forward, GeoQuant, a AI-based firm, said its models show a leveling-off of risk of war through the end of the year as well. The "trend supports an analysis that North Korea remains ultimately under Chinese control, checking the risk of outright war on the Korean peninsula," GeoQuant said in a blog post.

The greatest threat is miscalculation: Neither the U.S. nor North Korea seems to want war, but history shows that war often happens by its own rhythm. "Someone will decode that the other side is going to do something and take action to block it," Lewis said. Hence, geostrategists are likely to remain on edge as the brinksmanship between the two countries continues.

Go deeper

Updated 7 hours ago - World

Mexican President López Obrador tests positive for coronavirus

Mexico's President Andrés Manuel López Obrador during a press conference at National Palace in Mexico City, Mexico, on Wednesday. Photo: Ismael Rosas/Eyepix Group/Barcroft Media via Getty Images

Mexican President Andrés Manuel López Obrador announced Sunday evening that he's tested positive for COVID-19.

Driving the news: López Obrador tweeted that he has mild symptoms and is receiving medical treatment. "As always, I am optimistic," he added. "We will all move forward."

7 hours ago - Politics & Policy

Sarah Huckabee Sanders to run for governor of Arkansas

Sarah Huckabee Sanders at FOX News' studios in New York City in 2019. Photo: Steven Ferdman/Getty Images

Former White House press secretary Sarah Huckabee Sanders will announce Monday that she's running for governor of Arkansas.

The big picture: Sanders was touted as a contender after it was announced she was leaving the Trump administration in June 2019. Then-President Trump tweeted he hoped she would run for governor, adding "she would be fantastic." Sanders is "seen as leader in the polls" in the Republican state, notes the Washington Post's Josh Dawsey, who first reported the news.

Coronavirus has inflamed global inequality

Illustration: Aïda Amer/Axios

History will likely remember the pandemic as the "first time since records began that inequality rose in virtually every country on earth at the same time." That's the verdict from Oxfam's inequality report covering the year 2020 — a terrible year that hit the poorest, hardest across the planet.

Why it matters: The world's poorest were already in a race against time, facing down an existential risk in the form of global climate change. The coronavirus pandemic could set global poverty reduction back as much as a full decade, according to the World Bank.