Overview
On Tuesday, U.S. stocks ended mixed as geopolitical tensions initially weighed on sentiment before optimism surrounding Nvidia’s earnings and Walmart’s strong guidance lifted the S&P 500 and Nasdaq Composite into positive territory. Meanwhile, the Dow Jones Industrial Average closed lower, reflecting weakness in industrial stocks. The Nasdaq rose 1.04%, driven by a 4.9% surge in Nvidia shares ahead of its earnings report on Wednesday. The S&P 500 gained 0.40%, with the technology sector leading the way, while the Dow Jones dipped 0.28% due to losses in financials and energy stocks.
Early trading saw a decline across major indices as markets reacted to Russian President Vladimir Putin’s announcement lowering the threshold for a nuclear strike in response to conventional attacks. Stocks pared losses after Russia’s Foreign Minister Sergey Lavrov pledged efforts to prevent a nuclear escalation. Walmart shares climbed 3% to a record high, buoying investor sentiment after the retailer raised its annual profit and sales forecasts for the third time this year.
AI-related optimism also supported tech stocks, with Super Micro Computer soaring 31.2% after naming a new auditor and averting delisting risks. Netflix hit a record high, climbing 2.9% following news that 108 million viewers tuned in for a high-profile boxing match on the platform.
- Dow Jones Industrial Average: Fell 0.28% to 43,268.94
- S&P 500: Gained 0.40% to 5,916.98
- Nasdaq Composite: Rose 1.04% to 18,987.47
Fear & Greed Index
Neutral – Investors balanced concerns over geopolitical risks with enthusiasm for Nvidia’s earnings and strong retail guidance from Walmart.
Sector Performance
- Winners:
- Technology: Gained 1.2%, driven by Nvidia and AI-related optimism.
- Consumer Staples: Walmart’s strong performance pushed the sector higher as retail sales and profit forecasts exceeded expectations.
- Losers:
- Industrials: Declined 0.8%, reflecting geopolitical uncertainties and weaker performance in manufacturing stocks.
- Financials: Saw slight losses as investors rotated into growth-oriented sectors.
Key Movers
- Nvidia (NVDA): Climbed 4.9% ahead of its earnings report, with investors expecting strong results driven by AI-related demand.
- Walmart (WMT): Rose 3%, reaching a record high after raising its annual profit forecast for the third consecutive time.
- Super Micro Computer (SMCI): Soared 31.2% after naming a new auditor and avoiding delisting risks.
- Netflix (NFLX): Increased 2.9% to hit another record high, driven by its successful foray into live-streamed sports events.
Economic Data
- Market Breadth: Advancing issues outnumbered decliners by a 1.34-to-1 ratio on the Nasdaq, reflecting broad-based optimism in certain sectors despite geopolitical concerns.
- Volume Trends: Total trading volume was 13.94 billion shares, slightly below the 20-day average of 14.24 billion, indicating cautious trading amid geopolitical tensions.
Outlook
Investors remain focused on Nvidia’s earnings, which are expected to reflect strong demand for AI-driven technology, potentially setting the tone for tech stocks. While optimism around retail earnings and AI-related growth has lifted sentiment, geopolitical risks tied to the conflict in Ukraine may keep market volatility elevated. Additionally, President-elect Donald Trump’s cabinet picks, including Mehmet Oz for Medicare and Medicaid and Howard Lutnick for commerce secretary, have introduced uncertainty in healthcare and trade policy sectors.
As the holiday shopping season approaches, retail stocks are likely to stay in focus, particularly with earnings from major players like Target and Lowe’s set to release. However, industrials and financials may face continued pressure as geopolitical and policy uncertainties weigh on investor confidence. Markets are expected to remain volatile in the short term, with earnings reports and macroeconomic data shaping the broader sentiment.