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 (YM=F) led declines, down 0.5%, while S&P 500 futures (ES=F) slid roughly 0.3%. Contracts on the tech-heavy Nasdaq 100 (NQ=F) dropped 0.2%, 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 Joe Biden gave Ukraine the go-ahead to use US long-range missiles to strike inside Russia. Ukrain carried out its first such aerial attack in a border region on Tuesday morning.
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.
Retailers Walmart (WMT) and Lowe’s (LOW) posted quarterly reports before the bell, with investors watching out for hints to the resilience of the consumer. Walmart stock popped following a boost to guidance after a strong quarter. Lowe’s likewise beat on earnings and revenue, but the DIY giant’s shares slipped amid a negative outlook for sales.
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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