Dow, S&P 500, Nasdaq sink as Russia-Ukraine tensions spur rush to havens
US stock futures fell on Tuesday as worries about a nuclear escalation to the Russia-Ukraine war rattled markets, stealing focus from Nvidia (NVDA) earnings and other corporate results.
Dow Jones Industrial Average futures () led declines, down 0.6%, while S&P 500 futures () slid roughly 0.4%. Contracts on the tech-heavy Nasdaq 100 () dropped 0.3%, on the heels of 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 atomic weapons. The changes mean any large-scale aerial attack could prompt a nuclear response, and come just days after President Biden gave Ukraine the go-ahead to use US long-range missiles to strike inside Russia.
US bond prices climbed alongside gains for the yen (JPY=X), gold (GC=F), and other safe-haven assets as the risk-off trade kicked in. 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 jumped almost 1% to trade at around $2,639 an ounce.
The geopolitical situation blotted out themes such as corporate earnings, President-elect Trump’s cabinet picks, the path of interest rates, and Wall Street’s view of where stocks are headed.
Walmart (WMT) and Lowe’s (LOW) are lined up to post quarterly reports before the bell. Investors will watch the major retailers’ results for hints of consumers under pressure that could reflect stress in the economy.
Meanwhile, the countdown is on to Nvidia earnings on Wednesday, seen as a test of the AI trade that has powered gains on Wall Street. The chipmaker’s stock edged higher in premarket trading after getting bruised by a report of overheating issues with its flagship new AI product.
Goldman Sachs strategists said they expect outperformance by Nvidia and its “Magnificent Seven” tech megacap peers to narrow next year, in an S&P 500 (^GSPC) forecast setting a 6,500 target by the end of next year.
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