U.S. stock futures fell on Tuesday as concerns about a nuclear escalation of the war between Russia and Ukraine roiled markets, taking attention away from Nvidia’s (NVDA) earnings and other corporate results.
The Dow Jones Industrial Average futures () fell 0.6%, while the S&P 500 futures () fell about 0.4%. Contracts on the tech-heavy Nasdaq 100 () fell 0.3% after a mixed day for the major gauges.
Stocks are retreating as investors assess news that President Vladimir Putin has signed a revised nuclear doctrine that allows Russia to expand its use of nuclear weapons. The changes mean any large-scale airstrike could trigger a nuclear response, and come just days after President Biden authorized Ukraine to use US long-range missiles to invade Russia.
US bond prices rose along with gains for the yen (JPY=X), gold (GC=F) and other safe-haven assets as risky trading took off. Treasury yields – which move inversely to bond prices – fell, with the 10-year benchmark yield (^TNX) down 5 basis points to around 4.37%. Gold rose almost 1% to around $2,639 an ounce.
The geopolitical situation has sidelined issues such as corporate profits, President-elect Trump’s cabinet choices, interest rate movements and Wall Street’s view on stock prices.
Walmart (WMT) and Lowe’s (LOW) are lining up to post quarterly reports before the bell. Investors will be watching the results of the major retailers for indications that consumers are under pressure, which could reflect the tension in the economy.
Meanwhile, the countdown to Nvidia’s earnings began on Wednesday, seen as a test of the AI trading that has fueled gains on Wall Street. The chipmaker’s shares headed higher in premarket trading after being bruised by a report of overheating problems with its flagship new AI product.
Goldman Sachs strategists said they expect the outperformance of Nvidia and its “Magnificent Seven” tech megacap peers to decline next year, in an S&P 500 (^GSPC) forecast that includes a target of 6,500 applies.
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