Global Markets Tumble as Geopolitical Tensions Escalate
Investor anxiety has reached a fever pitch as the Russia-Ukraine conflict takes a worrying turn, sending US stock futures plummeting on Tuesday. The Dow Jones Industrial Average futures led the decline, down 0.5%, while S&P 500 futures slipped 0.3%. The tech-heavy Nasdaq 100 contracts also fell 0.1%.
Nuclear Fears Take Center Stage
The catalyst for the market downturn was President Vladimir Putin’s signing of a revised nuclear doctrine, allowing Russia to expand its use of atomic weapons. This development has sparked concerns about a potential nuclear escalation, particularly in the wake of President Joe Biden’s decision to permit Ukraine to use US long-range missiles to strike inside Russia.
Safe-Haven Assets Soar
As investors flock to safer havens, US bond prices have surged, accompanied by gains in the yen, gold, and other risk-off assets. Treasury yields have fallen, with the 10-year benchmark yield down 5 basis points to around 4.37%. Gold has jumped almost 1% to trade at around $2,639 an ounce.
Earnings Take a Backseat
The geopolitical turmoil has overshadowed corporate earnings, including those from retail giants Walmart and Lowe’s. Despite posting strong quarterly reports, investors are more focused on the broader market implications of the Russia-Ukraine conflict.
Walmart’s E-Commerce Success
Walmart has made significant strides in its e-commerce efforts, expanding its online assortment and refining its “buy online, pick up in store” functionality. The retailer’s e-commerce results have been impressive, with notable growth across divisions.
Nvidia Earnings on the Horizon
All eyes are on Nvidia’s earnings report, scheduled for Wednesday, which will be seen as a test of the AI trade that has driven gains on Wall Street. Goldman Sachs strategists predict that Nvidia and its tech megacap peers will continue to outperform, albeit at a slower pace, in 2025.
Goldman Sachs’ 2025 Outlook
David Kostin, Goldman Sachs’ chief US equity strategist, has called out specific stocks in his 2025 outlook piece, including the “Magnificent Seven” tech megacaps. Kostin expects another year of strong performance, although not as robust as recent years, citing rich valuations and hearty profit growth expectations.
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